Northwest Indiana has one of the lowest industrial vacancy rates in the Chicago metropolitan market, which just posted its strongest industrial absorption rate in four years, with 9 million square feet leased or purchased between January and March.
The vacancy rate in the greater metro area dropped 54 basis points over the past year to 7.05 percent, and should drop below 7 percent for the first time in 15 years, according to a Colliers International quarterly report. The Chicago industrial market hasn’t absorbed so much industrial real estate since 2011.
But Northwest Indiana’s industrial vacancy rate remains even lower than the rest of the metro area.
In the Region, the industrial vacancy rate climbed to 5.75 percent in the first quarter, up from 5.1 percent in the fourth quarter of 2015, but remained significantly below the rest of the Chicago metropolitan area, according to Colliers. The Northwest Indiana market has 54.9 million square feet of inventory, including 189,813 square feet that was added over the last three months.
So far this year, nearly 85,000 square feet of industrial real estate in the Calumet Region has been leased, and another 40,000 square feet is under construction, Colliers found.
Lately, industrial real estate in Northwest Indiana has been renting for an average of $3.86 per square foot and selling for $31.85 per square foot.
NAI Hiffman, another commercial real estate firm that publishes market data every quarter, said Northwest Indiana’s first quarter results were “nominal” after the absorption of 128,439 square feet of industrial space, which is when companies lease or buy what’s available on the market.
Becknell Industrial finished a 163,000-square foot speculative building in the Northwind Crossings business park in Hobart, with Calpipe Industries leasing just over half the space. Yukon Steel Components also leased a 20,000-square-foot building at 3200 Sheffield Avenue in Hobart.
Mike’s Landscape LLC also spent $500,000 to purchase a 20,400-square-foot building at 3496 E. 84th Place in Merrillville.
Buildings with as much as 341,249 square feet of space remain available in Northwest Indiana, but the Region will likely need more inventory to keep up with demand.
“The vacancy rate remains 150 basis points below the overall metropolitan area rate of 7.20 percent, in part due to the limited speculative construction activity coupled with consistent leasing activity,” NAI Hiffman noted in the report.