Central Indiana

2021 - LAND REPORT

Market Overview

Demand for land in Indiana is booming. Real estate developers,
farmers, and investors are buying as much land as they can
get due to demand in their specific product types. Industrial
real estate developers are responding to the trend of increased
demand for industrial buildings such as warehouse and
distribution centers due to the explosive growth of e-commerce.
Single and multifamily real estate developers are responding
to increased demand for housing due to shortages of supply.
Farmers are wanting more land to expand their operations
because of an increase in commodity prices. Investors are
purchasing land, more specifically farmland, due to the value
they see in the land. Historically low interest rates further entice
developers, farmers, and investors to purchase land because
lower rates mean lower costs to borrow.

Even though there is high demand for land, there is a significant
lack of willing sellers throughout the Central Indiana area.
There are many types of land: agricultural, transitional,
development, path of progress and re-development, to name a
few. Due to the current lack of supply, prices are being pushed
up, meaning that those in the market to sell right now would
likely get top dollar for their property from the developers,
farmers, and investors looking to buy.

Population

2,034,728

Households

790,307

Median Household Income

$61,305

Education

27% Highschool
27% Some College
36% Bach/Grad+

Total Businesses

66,206

Total Employees

1,011,041

Source: Esri

DEVELOPERS

Developers are looking for land in Central Indiana. Due to the
disruption caused by the pandemic and accelerated trends
in shopping online and working from home, both industrial
and residential developers are looking to build. Industrial
and residential real estate product types go hand-in-hand.
When one type is built, the other follows. Central Indiana is
seeing the construction of industrial facilities and residential
areas relatively close by, and any land for sale is quickly being
purchased.
Not only are in-state developers purchasing land in Central
Indiana, out-of-state/coastal developers are too. These developers have historically not invested in Indiana as heavily and are used to paying higher prices for land. They are able to compete with other developers, resulting in land value going up from increased demand.

INTELLIGENCE

Developers are grabbing
large swaths of land to
develop industrial parks
focused on warehousing
and distribution.

The Mount Comfort
area, Whitestown, and
Plainfield are popular
locations for purchasing
land to build industrial
product.

Out-of-state developers
are starting to more
heavily invest in Central Indiana than in the past, which is driving up land prices due to competition
for land and scarcity of
land for sale.

INDUSTRIAL DEVELOPMENT

OFFICE IS EMERGING FROM ITS HOLDING PATTERN AND IS SET FOR MORE ACTIVITY NOW AND IN THE FUTURE

Demand for industrial product has grown significantly in Indianapolis, with many
developers scooping up land to build warehouse and distribution centers around the
Indianapolis Metropolitan Area. Some of the more popular locations to purchase land
are in the Mount Comfort area in Hancock County, on the East side of the Indianapolis
metro, Whitestown in Boone County to the Northwest and Plainfield in Hendricks
County near the Indianapolis International Airport to the Southwest.
• Mohr Capital out of Dallas is one of the largest developers purchasing land in
Indianapolis for industrial development. The company is developing a 500-acre
industrial park in Whiteland, in Johnson County with multiple speculative buildings.¹
• The Opus Group, out of Minnesota, is another industrial development company
who purchased land in Mount Comfort and is building build-to-suit and speculative
warehouse and distribution facilities on over 170 acres.²
• Even companies from overseas, like Kajima Corporation, are buying land to build
speculative industrial distribution space over 33 acres in Whitestown through their
American subsidiary called Core 5 Industrial Partners.³
• Other developers with large industrial developments on the way include: Ambrose,
Becknell Industrial, Browning, Holladay Properties, Lauth, Patch Development,
Prologis, and Strategic Capital Partners.
• Amazon and Wal-Mart are large tenants in the Mount Comfort area, with Amazon
filling a 615,000 square-foot distribution center and Wal-Mart in a 2.2 million squarefoot
fulfillment center.
These developers are scooping up large pockets of land that was either on-market or
off-market. Industrial land sale prices have increased across the country. A market
survey completed by the REALTORS Land Institute and the National Association
of REALTORS shows that Industrial land price increases have outpaced the average
percent increase of all types of land throughout the United States. Land in the U.S. and
the popular industrial areas around Indianapolis will continue to rise in value as more
developers enter the market and competition for the remaining land increases.

Trends

The number of lease transactions will continue to increase as the economy comes out of the recession and as more leases expire. The timeline for change in the office market is longer than other product types due to the longer average contract length.
Indianapolis is projected to have a 2.2% total job increase in 2021, this is the beginning of a job recovery from 2020 where there was a decline of 1.7% in total jobs (18,300 jobs) in Indy. The city should recover all its lost jobs by 2022.2
The annual net absorption for 2020 was negative and is expected to remain negative in 2021. Inventory is expected to increase with the delivery of multiple developments within the year. This will most likely increase the vacancy rate near year-end 2021.2

Sources

CoStar
Moody’s Analytics REIS
Inside Indiana Business
Real Capital Analytics
Bradley Company
KPMG

OFFICE ASKING RENT & VACANCY

Source: CoStar

OFFICE ABSORPTION TRENDS

Source: CoStar

OFFICE SALES TRANSACTION VOLUME ($)

Source: CoStar

IINDUSTRIAL DEVELOPMENT

• Mohr Capital out of Dallas is one of the largest developers purchasing land in Indianapolis for industrial development. The company is developing a 500-acre industrial park in Whiteland, in Johnson County with multiple speculative buildings.¹
• The Opus Group, out of Minnesota, is another industrial development company who purchased land in Mount Comfort and is building build-to-suit and speculative warehouse and distribution facilities on over 170 acres.²
• Even companies from overseas, like Kajima Corporation, are buying land to build speculative industrial distribution space over 33 acres in Whitestown through their American subsidiary called Core 5 Industrial Partners.³
• Other developers with large industrial developments on the way include: Ambrose, Becknell Industrial, Browning, Holladay Properties, Lauth, Patch Development, Prologis, and Strategic Capital Partners.
• Amazon and Wal-Mart are large tenants in the Mount Comfort area, with Amazon filling a 615,000 square-foot distribution center and Wal-Mart in a 2.2 million squarefoot fulfillment center.

These developers are scooping up large pockets of land that was either on-market or off-market. Industrial land sale prices have increased across the country. A market survey completed by the REALTORS Land Institute and the National Association of REALTORS shows that Industrial land price increases have outpaced the average percent increase of all types of land throughout the United States. Land in the U.S. and the popular industrial areas around Indianapolis will continue to rise in value as more
developers enter the mark.et and competition for the remaining land increases have outpaced the average percent increase of all types of land throughout the United States. Land in the U.S. and the popular industrial areas around Indianapolis will continue to rise in value as more developers enter the market and competition for the remaining land increases.

INTELLIGENCE

Developers are grabbing
large swaths of land to
develop industrial parks
focused on warehousing
and distribution.
• The Mount Comfort
area, Whitestown, and
Plainfield are popular
locations for purchasing
land to build industrial
product.
• Out-of-state developers
are starting to more
heavily invest in Central
Indiana than in the past,
which is driving up land
prices due to competition
for land and scarcity of land for sale.

RETAIL ASKING RENT & VACANCY

Source: CoStar

RETAIL ABSORPTION TRENDS

Source: CoStar

RETAIL SALES TRANSACTION VOLUME ($)

Source: CoStar