3. INDY NUMBERS
INDPLS MSA INDIANA U.S.
POPULATION 2011 ESTIMATED
1.78 6.51 311.6
million million million
POPULATION GROWTH SINCE 2000
16.6% 7.2% 9.6%
UNEMPLOYMENT JUNE 2012
7.8% 8.0% 8.2%
INDY RECOGNITION
– Indiana has earned the top AAA bond rating by all 3 major credit rating agencies.
– Indiana ranks 9th in Logistics employment and 10th in freight shipments by tonnage.
– Indiana bumped up two spots, now ranking 6th of the 50 states in Business Climate. Site Selection Magazine 2011
– Indianapolis MSA listed in Top 50 Hottest Cities in the Nation. Brookings Institute 2010
– 12th largest City in the U.S.; 35th largest MSA – Estimated Population; 27th ranked MSA – Economic Strength. Policom 2012
– CEOs rank Indiana 1st in the Midwest and 5th in the U.S. for “Best & Worst States for Business”, earning a 4 out of 5
rating in all 3 categories: Tax & Regulation, Quality of Workforce, and Living Environment. Chief Executive Magazine 2012
– Conexus Indiana, the state’s Advanced Manufacturing and Logistics (AML) initiative, will launch its new high school-level AML curriculum
in Fall 2012 at Hoosier high schools and career centers. The curriculum is designed to give Indiana students a head-start on careers in
the state’s largest economic sector.
– Indiana remains in the Top 10 States for Bioscience employment. It is one of only two states offering specialized bioscience employment
in 4 of the 5 subsectors – Agricultural Feedstock & Chemicals, Drugs & Pharmaceuticals, Medical Devices & Equipment, Research, Testing
& Medical Laboratories, and Bioscience Distribution. Indiana’s bioscience jobs have grown by 14% over the last decade, outpacing the
national average of 6.4%. Batelle/Biotechnology Industry Organization (BIO) Report “State Biosciene Industry Development 2012”
– Indiana received a Gold Shovel award in 2011 and Silver Shovels in 2010, 2009, and 2008 for Top Investment Projects, among states with
population of 5 – 9 million. Area Development Magazine, Summer 2012
– Site Selection Magazine recognized Indy Partnership as one of the Top Ten Economic Development Groups, citing its ability to create
job growth and capital investment in the 9-county region. Site Selection Magazine 2011
– Indiana is home to the 5th largest wind farm in the U.S. (the 4 largest are all in Texas)
OTHER SOURCES:
U.S. Census Bureau and U.S. Department of Labor
Indiana Workforce Development
Indiana Economic Development Corporation
Develop Indy
Conexus Indiana
Summit Realty Group Research Department
SUMMIT REALTY GROUP l Cushman & Wakefield Alliance
www.SummitRealtyGroup.com 3
4. INDUSTRIAL
VACANCY & ABSORPTION
STATS ON THE GO
The Indianapolis industrial market continued to make
Y-O-Y
impressive gains in Q2 2012. The overall vacancy rate for the Q2 2011 Q2 2012 CHANGE
market stands at 6.7%, down from 7.5% just one quarter ago. Overall Vacancy 8.9% 6.7%
A number of large leases in Q2 contributed to this drop in
Manufacturing
vacancy including: Prime Distribution’s lease of 412,000 square Avg. Net Rental Rate (psf/yr) $2.22 $2.03
feet (sf) in the South submarket, Henry Schein’s lease of 380,160 Warehouse / Distribution $3.07 $3.01
sf in the Northwest submarket, and Atkins Nutritional’s lease Avg. Net Rental Rate (psf/yr)
of 211,500 sf in the East submarket, among others. Flex $5.78 $6.00
Avg. Net Rental Rate (psf/yr)
With year-to-date leasing activity at 3.8 million square feet (msf),
and outpacing the previous four years, this trend of steadily
2012 YTD LEASING ACTIVITY
declining vacancy rates and positive absorption and is expected Submarket Distribution
to continue. CBD
NORTHEAST 3.1%
5.4%
RETURN OF SPECULATIVE CONSTRUCTION
SOUTH
The steady decline in vacancy over the past six quarters has EAST 32.2%
11.5%
not only led to an increase in investment sale activity, which
currently stands at 3,001,733 sf sold to investors at mid-
year, but also the return of speculative construction to the
Indianapolis industrial market.
A lack of large contiguous modern bulk space has spurred a
new wave of speculative construction, which to-date includes SOUTHWEST
23.8%
three buildings totaling over 1.8 msf already under construction
with target delivery dates in Q4 2012. Largest of these is the EAST
11.5%
794,608-sf IDI World Connect Building 1 at Ameriplex. Next
is the ProLogis 622,440-sf 445 Air Tech building. And lastly, the
450,000-sf VanTrust Project One Building. All three buildings
are located in the Southwest submarket. NOTABLE NEW LEASE TRANSACTIONS
Mid-year 2011 – Mid-year 2012
These speculative projects, along with ongoing build-to-suit BUILDING SUBMARKET TENANT SF
construction for companies such as Vance & Hines, Regal * 800 S Perry Rd Southwest online retailer 925,800
Beloit and Helmer, further showcase the attractiveness of the * 700-716 Airtech Pkwy Southwest RR Donnelley 799,344
business climate in Indianapolis, as well as the peace of mind 2001 Commerce Pkwy South Anderson Merchandisers 703,496
that the state’s economic stability can offer companies looking * 760 Commerce Pkwy South Prime Distribution 412,000
5445 Guion Rd Northwest Henry Schein 380,160
to relocate.
600 S Perry Rd Southwest Jacobson Warehouse Co. 333,566
* 1551 S Perry Rd Southwest GENCO (sublease) 308,620
OUTLOOK
* 700 Commerce Pkwy W South GENCO-ATC 292,500
Ongoing interest in the favorable economic climate of the * 3023 N Distribution Way East Atkins Nutritionals, Inc. 211,500
Indianapolis market continues to attract both investors and * 909 Whitaker Rd Southwest Smart Warehousing, LLC 190,440
business owners looking for the best and most fiscally sound 2516-2548 Airwest Blvd Southwest Apotex 156,590
environment to run their businesses. As net rents continue * 850 N Graham Rd South KYB America, LLC 153,748
to increase, and with no foreseeable let up in demand for * 2800 Airwest Blvd Southwest Thermal Structures, Inc. 141,028
modern warehouse/distribution space, it is anticipated that 1105 E Northfield Dr Northwest Life Science Logistics (expansion) 132,000
2525 N Shadeland Ave East Fresh Warehouse 128,000
more speculative construction will likely break ground before
7900 Rockville Rd Southwest Jacobson Warehouse Co. 124,377
the end of 2012.
595 Perry Rd Southwest Hanzo Logistics (expansion) 106,875
4760 Kentucky Ave Southwest Sunshine Manufacturing 105,800
5345 Decatur Blvd Southwest Rolls-Royce Corporation 81,759
* denotes Summit brokered transaction
4
5. Q2 2012 INDUSTRIAL SUBMARKET STATISTICS
NORTHWEST
NORTHWEST TOTAL INVENTORY 48,504,997 SF
NORTHEAST
VACANCY RATE 6.1%
AVAILABLE SF 2,962,444 SF
YTD ABSORPTION 599,535 SF
86th Street
NORTHEAST
Meridian St
Keystone Ave
TOTAL INVENTORY 18,358,564 SF
VACANCY RATE 9.3%
vd
Bl
AVAILABLE SF 1,710,087 SF
d
or
YTD ABSORPTION 211,790 SF
nf
Bi
EAST
TOTAL INVENTORY 35,977,995 SF
VACANCY RATE 8.0%
AVAILABLE SF 2,863,005 SF
YTD ABSORPTION 214,312 SF
SOUTHWEST EAST CBD
TOTAL INVENTORY 23,916,281 SF
CBD VACANCY RATE 12.4%
AVAILABLE SF 2,956,095 SF
YTD ABSORPTION 285,952 SF
SOUTH
TOTAL INVENTORY 18,548,672 SF
Indianapolis
International
SOUTH VACANCY RATE 6.7%
Airport
AVAILABLE SF 1,236,381 SF
YTD ABSORPTION 763,709 SF
SOUTHWEST
TOTAL INVENTORY 67,997,265 SF
VACANCY RATE 3.9%
AVAILABLE SF 2,624,309 SF
YTD ABSORPTION 1,315,380 SF
OVERALL INDIANAPOLIS INDUSTRIAL MARKET
YTD OVERALL
TOTAL MARKET INVENTORY OVERALL VACANCY RATE TOTAL AVAILABLE SF
NET ABSORPTION
213,303,774 SF 6.7% 14,352,321 SF 3,390,678 SF
Overall Vacancy and Net Absorption include both direct and sublease space being marketed as vacant.
Tracked statistics include Marion and surrounding counties in roughly a 25-mile radius around downtown Indianapolis.
Industrial statistics include single & multi-tenant buildings with minimum 15,000 rentable square feet (rsf).
Overall Vacancy and Net Absorption include both direct and sublease space being marketed as vacant.
SUMMIT REALTY GROUP l Cushman & Wakefield Alliance
www.SummitRealtyGroup.com 5
6. OFFICE
VACANCY
STATS ON THE GO
Vacancy rates continued their downward trend in the first half
Y-O-Y
of 2012. Overall vacancy for the Indianapolis market stands at Q2 2011 Q2 2012 CHANGE
21.1%, down from 22.3% a year ago. Overall vacancy is down, CBD Overall Vacancy 20.3% 21.3%
year-over-year, in 8 of the 12 submarkets. Notable changes
were seen in the two largest Suburban submarkets, Keystone Suburban Overall Vacancy 23.1% 21.1%
Crossing and the Meridian Corridor, where overall vacancy CBD Class A $22.55 $20.31
rates fell to 17.8% and 19.7% respectively Q2 2012, down from Direct Asking Rents (psf/yr)
22.5% and 21% Q2 2011. Suburban Class A $19.20 $18.53
Direct Asking Rents (psf/yr)
For the Keystone Crossing submarket, a combination of
low overall vacancy, high direct average asking rates, and
2012 YTD LEASING ACTIVITY
steady leasing activity has led to the construction of the first
Submarket Distribution
speculative office building in the Indianapolis market since 2008. OTHER
SOUTH
2.2%
The 3-story, 80,700-square foot (sf) class A building, by local 3.4%
CASTLETON
developer Sourwine, will begin construction Q3 2012 and is 7.4%
CBD
scheduled for delivery Q2 2013. 28.3%
KEYSTONE
CROSSING
LEASING & ABSORPTION 8.7%
Although 2012 leasing activity is not yet at the same level as
first half of 2011, the trend of consistent improvement remains
steady. One major factor in this trend is the re-emergence I-69 / SHADELAND
of the CBD. The CBD, which had fallen behind suburban 11.9%
submarkets in the previous two years, accounted for 28.3%
of year-to-date leasing activity for the entire market. This
activity makes it the strongest performing submarket in the MERIDIAN
NORTHWEST
CORRIDOR
Indianapolis MSA through mid-year 2012. Contributing to this 15.5%
22.6%
strong performance is the sub-lease of three floors totaling
60,000+ sf to multiple tenants at the PNC Center. As this
space is absorbed over the coming quarters, overall vacancy
rates will continue to trend downward. NOTABLE NEW LEASE TRANSACTIONS
Mid-year 2011 – Mid-year 2012
Large leases signed in previous quarters have been absorbed BUILDING SUBMARKET TENANT SF
in the first half of 2012, contributing to the lowered vacancy 9200 Keystone Crossing Keystone Crossing State Farm 88,408
280 E 96th St Meridian Corridor Travelers Insurance 55,113
rates in many submarkets. Some of these include: State Farm
6335-6345 Castleway Ct Castleton IU Health 34,638
with more than 80,000 sf in the Keystone Crossing submarket;
PNC Center CBD Kronos 31,725
Travelers Insurance with 55,113 sf in the Meridian Corridor; 9480 Priority Way W Dr Keystone Crossing Magnolia Health Systems 30,009
and Kightlinger + Grey’s lease of 23,537 sf in the CBD. 9998 Crosspoint Blvd 1-69 / Shadeland Stanley Convergent Security 26,000
* 8415 Allison Pointe Blvd Castleton Comcast 23,785
OUTLOOK 1 Indiana Square CBD Kightlinger & Gray, LLP 23,537
The Indianapolis office market is poised to make larger gains 11611 N Meridian St Meridian Corridor Liberty Mutual 23,507
* 8440 Allison Pointe Blvd Castleton DuCharme McMillen & Assoc 22,163
in the 2nd half of 2012 than it did in the first. Activity has
* PNC Center CBD FinishMaster (sublease) 21,996
been consistent, and is expected to pick up as the US economy
* 1320 City Center Dr Meridian Corridor Fresenius Medical Care 21,673
continues to stabilize. The consistent positive trends in the
* 250 W 96th St Meridian Corridor David A. Noyes 20,068
market are likely to further increase investor interest, and 7333 W Washington St Airport Ivy Tech Community College 19,615
suggest that a pick-up in activity will be seen in the coming 111 Congressional Blvd Meridian Corridor Shepherd Insurance 18,964
quarters. * 250 W 96th St Meridian Corridor David A. Noyes (sublease) 18,812
3600 Woodview Trace Northwest National American University 17,914
8900 Keystone Crossing Keystone Crossing T2 Systems 17,801
4040 Vincennes Cir Northwest GexPro 17,789
6 * 135 N Pennsylvania St CBD General Electric 16,644
* denotes Summit brokered transaction
7. Q2 2012 OFFICE SUBMARKET STATISTICS
NORTHWEST MERIDIAN CORRIDOR CARMEL I-69 / SHADELAND
TOTAL INVENTORY 3,993,296 SF TOTAL INVENTORY 6,390,580 SF TOTAL INVENTORY 678,212 SF TOTAL INVENTORY 2,598,651 SF
VACANCY RATE 21.2% VACANCY RATE 19.7% VACANCY RATE 25.5% VACANCY RATE 21.5%
AVAILABLE SF 847,253 SF AVAILABLE SF 1,260,942 SF AVAILABLE SF 173,102 SF AVAILABLE SF 559,529 SF
YTD ABSORPTION -171,486 SF YTD ABSORPTION 150,381 SF YTD ABSORPTION 12,745 SF YTD ABSORPTION 131,927 SF
KEYSTONE CROSSING
NORTHWEST MERIDIAN NORTH/ I-69 & TOTAL INVENTORY 4,099,762 SF
CORRIDOR CARMEL SHADELAND VACANCY RATE 17.8%
AVAILABLE SF 728,805 SF
KEYSTONE YTD ABSORPTION 110,484 SF
86th Street
CASTLETON
TOTAL INVENTORY 2,200,535 SF
CASTLETON VACANCY RATE 26.4%
vd
d
Bl AVAILABLE SF 580,850 SF
or
YTD ABSORPTION 10,238 SF
nf
Bi
EAST
MIDTOWN
MIDTOWN
Keystone Ave
TOTAL INVENTORY 1,380,229 SF
VACANCY RATE 8.3%
Meridian St
AVAILABLE SF 113,890 SF
YTD ABSORPTION -1,501 SF
WEST
EAST
TOTAL INVENTORY 691,527 SF
VACANCY RATE 20.7%
CBD
AVAILABLE SF 142,993 SF
YTD ABSORPTION 0 SF
AIRPORT
SOUTH
CBD
TOTAL INVENTORY 10,650,901 SF
Indianapolis
International VACANCY RATE 21.3%
Airport
AVAILABLE SF 2,266,898 SF
YTD ABSORPTION -142,184 SF
SOUTH
TOTAL INVENTORY 1,443,500 SF
VACANCY RATE 21.0%
AVAILABLE SF 303,187 SF
YTD ABSORPTION 12,527 SF
OVERALL INDIANAPOLIS OFFICE MARKET AIRPORT
TOTAL INVENTORY 969,835 SF
YTD OVERALL
TOTAL MARKET INVENTORY OVERALL VACANCY RATE TOTAL AVAILABLE SF VACANCY RATE 26.4%
NET ABSORPTION
AVAILABLE SF 256,290 SF
36,067,619 SF 21.1% 7,613,005 SF 117,749 SF YTD ABSORPTION -867 SF
Overall Vacancy and Net Absorption include both direct andin roughly space being marketed as vacant. Indianapolis.
Tracked statistics include Marion and surrounding counties sublease a 25-mile radius around downtown
Office statistics include multi-tenant buildings with minimum 15,000 rentable square feet (rsf).
Overall Vacancy and Net Absorption include both direct and sublease space being marketed as vacant. WEST
TOTAL INVENTORY 970,591 SF
VACANCY RATE 39.1%
AVAILABLE SF 379,266 SF
YTD ABSORPTION 5,485 SF
SUMMIT REALTY GROUP l Cushman & Wakefield Alliance
www.SummitRealtyGroup.com 7
8. CAPITAL MARKETS
CENTRAL INDIANA NOTABLE INVESTMENT SALES – INDUSTRIAL
The Central Indiana investment markets have seen steady Mid-year 2011 – Mid-year 2012
activity in the first half of 2012. Modern bulk industrial remains PROPERTY SF
the most active product type. However, sellers of office are KPJV Distribution – 5 Building Portfolio 2,128,822
beginning to realize the benefits of increased interest in the Anderson Merchandisers Building, Franklin IN 703,496
Central Indiana market. Generally, buyers have been attracted Park 100, Building 56 300,000
to a healthy positive spread on yields when compared to first AllPoints at Anson, Building 14 280,000
tier markets, in combination with increasingly attractive debt
7250 E 90th Street 89,000
terms.
INDUSTRIAL
The industrial market has remained strong through the first NOTABLE INVESTMENT SALES – OFFICE
half of 2012 as investors continue to view Central Indiana Mid-year 2011 – Mid-year 2012
as a stable market providing attractive yields at a cost basis BUILDING SF
significantly below the most competitive markets across the Chase Tower (under contract) 1,057,877
country. Specifically, institutional investors and publicly traded 111 Congressional Blvd 177,957
REITs continue to target modern bulk distribution centers,
Haverstick 1 & II 77,984
which has led to continued cap rate compression. The modern
Pennwood 1 & II 71,892
bulk product overall vacancy rate is 6.8%. Coupled with the
declining cap rate environment, developers have begun, or are
in the final stages of, planning speculative bulk developments.
Medium distribution and flex have not yet seen the same
investor interest. Those product types have yet to experience INDIANAPOLIS 400
ROLLING 12-MO. TOTAL QUARTERLY VOLUME
OFFICE
the same level of cap rate compression, causing owners to hold SALES
350
assets and focus on improving overall performance. Sales by Total $ (mil) 300
250
OFFICE 200
The office investment market is beginning to show signs of 150
recovery, with a significant increase in the number of projects
100
being brought to market over the first half of the year. Investors
are slowly re-entering the Central Indiana office market in
50
hopes of taking advantage of the attractive spreads between 0
Q1 '09 Q1 '10 Q1 '11 Q1 '12
going-in yields and the low interest rate lending environment.
Specifically, the Indianapolis CBD has been active with the sale
of Chase Tower and a multitude of properties expected to
trade in the 3rd quarter including Circle Tower, Capital Center,
INDIANAPOLIS 500
ROLLING 12-MO. TOTAL QUARTERLY VOLUME
and the Farris Building to name a few.
INDUSTRIAL 450
SALES 400
Sales by Total $ (mil) 350
300
250
200
150
100
50
0
Q1 '09 Q1 '10 Q1 '11 Q1 '12
Sales Graphs Source:
Real Capital Analytics
8
9. MULTI-FAMILY
OVERVIEW NOTABLE MULTI-FAMILY SALES – YTD 2012
The Indianapolis multi-family market finished the first half PROPERTY GRADE # UNITS
of 2012 with an uptick in occupancies and rental rates – Lakes of Carmel A 324
typical after the seasonal dip Midwest owners have become Ashgrove B 57
accustomed to. Atypical is the velocity at which the rental Brockton B 284
market strengthened – a notable 2.1% growth over this time Oak Lake at Crooked Creek B 216
last year, coupled with rent growth. This growth, combined Piccadilly B 54
with the number of new units delivered over the past 24 months, Hillcrest Woods B- 384
enables us to paint a very positive picture of the Indianapolis
Cold Springs Manor C 109
rental market.
Red Mill C 164
Vineyards at Apple Creek C 198
The downtown rental market continues to dominate overall,
due to an under supply of product, significant job growth and a
growing student population at the IUPUI campus. Occupancy AVERAGE QUOTED RENTS – MARKET WIDE
in the downtown market continues to tighten, with “A” and “B” $690
$695
grade properties averaging 96%. Despite seeing the majority $695
$683
of new multi-family construction, the north submarket remains $685 $675 $677
strong. $675
$659
$665
The transaction market was fairly active during the second half
$655 $645
of 2011, with the majority of the year’s $200 million trading
$645
during that time. While transaction volume during the first
half of 2012 was (<$90 million), it is likely we will see similar $635
or slightly more activity in Q3 and Q4. As in 2011, “B” and $625
“C” grade properties continue to dominate the Indianapolis 2006 2007 2008 2009 2010 2011 Q2 12
transaction market as investors become increasingly anxious
to churn equity and lenders push out REO product as well as AVERAGE OCCUPANCY RATES – MARKET WIDE
assets requiring recapitalization. 94%
93%
OUTLOOK
The future of the Indianapolis apartment investment market 92%
remains positive due to favorable debt markets, rent and 91%
occupancy trends and relative affordability in comparison 90%
to other midwest markets. These factors have contributed
89%
significantly to a large group of new investors to the market
and we expect this trend to continue. 88%
89%
90%
92%
90%
91%
92%
93%
87%
2006 2007 2008 2009 2010 2011 Q2 12
STATS ON THE GO
PROPERTY COUNT 632 AVERAGE RENT PER SF BY CLASS
TOTAL UNITS 122,529 $1.00
$0.93
$0.95
AVERAGE UNITS / PROPERTY 198
$0.90
AVERAGE OCCUPANCY RATE 92.1% $0.85
AVERAGE YEAR BUILT 1974 $0.80
$0.75
$0.75
$0.68
$0.70
$0.65
SUMMIT REALTY GROUP l Cushman & Wakefield Alliance $0.60 CLASS A CLASS B CLASS C
www.SummitRealtyGroup.com 9
10. HEALTHCARE
The healthcare sector remains one of the fasting growing business AVERAGE RENTAL RATES
segments within central Indiana. Naturally, this has also driven OVERALL FULL SERVICE
$20.00
growth in the underlying real estate serving this sector. Major
$19.50
$19.22
hospital systems continue to control the bulk of construction, with
$18.42
large scale projects in the works at Exit 10 in Fishers submarket
$17.57
$17.52
$17.45
$17.37
$16.90
$16.64
$16.53
$16.42
$16.24
$16.19
and in Greenwood area, South submarket. While no speculative
$15.84
$15.00
$15.14
$14.72
buildings are coming out of ground, there has been continued
$14.62
$14.29
$13.79
demand for medical office space and new pre-leased buildings are
$12.48
under construction. $10.00
Corresponding with the two high growth markets previously
mentioned, Fishers and South submarkets also bring in the highest
$5.00
average full service rental rates. The rates for the remaining
submarkets were relatively consistent across the board, which
speaks to the strong and stable healthcare market. Overall, rental
rates remain steady and are historically slow to fluctuate. We do $0.00
not foresee any changes within these rates in the short term.
Leasing activity was primarily clustered in the north-oriented
submarkets as well as the South submarket. Activity in the South 2012 YTD LEASING ACTIVITY
was mainly due to growth and expansion of the St. Francis Hospital Submarket Distribution
FISHERS
system. While activity in the northern markets consisted generally WEST 3.3%
4.1% MERIDIAN
EAST
of practices consolidating, the leasing of the medical office buildings 5.0%
CORRIDOR
17.8%
near both the IU Health & St Vincent North campuses, and the
SW HENDRICKS
growth of the hospital systems as they bring many practices back 5.8%
onto their campuses. The relatively low leasing activity in the
Fishers submarket is a bit misleading, as demand has far outpaced CBD
7.9%
supply. CARMEL
16.6%
The big question looming over this sector is what the new healthcare
NORTHEAST
reform will mean to medical office real estate. Speculation spans 9.7%
the entire spectrum – from an increase in demand due to the
additional number of insured, to the continued growth of the NORTHWEST SOUTH
13.9% 15.9%
hospital systems which could lead to a reduction in the demand for
independent medical office buildings. While specifics are unclear
at this point, healthcare reform will surely cause both hospital SUBMARKET AVAILABILITY
systems and private practices to reexamine their business models. 600,000
Any adjustments could potentially limit funds available for medical
office space, as well as affect rental rates of medical office buildings 500,000 AVAILABILITY RENTAL RATE
512,951
controlled by hospitals.
478,918
456,805
400,000
We anticipate the healthcare real estate market to remain steady
400,550
over the next six months while the outcome of the Fall election
300,000
is decided. 2013 however, will definitely be a year of change as
279,435
the market attempts to reposition itself in the changing healthcare
244,475
227,882
200,000
landscape.
166,026
100,000
118,944
94,809
0
10
11. BLOOMINGTON
MARKET OVERVIEW
STATS ON THE GO
As a university town with several growing industries, Bloomington’s
AVERAGE
economy has been somewhat insulated from but not entirely OVERALL PSF
immune to the economic downturn. Nonetheless, its economy INVENTORY VACANCY RENT
is showing signs of a recovery. There is significant infrastructure Industrial 9.8 msf 7.9% $4.68
investment underway, including the rebuilding of the SR-46 Bypass,
major improvements to Walnut Street, the re-opening of West Office 2.4 msf 11.3% $12.02
3rd Street, and the impending connection of I-69. As a result, the
Medical Office 631,844 sf 5.0% $13.35
market is primed for change, growth, and investment.
Multi-Family 11,894 units 3.3% $0.96
MULTI-FAMILY
The strongest product in the Bloomington market remains multi-
family. The occupancy rate on the approximately 12,000 units
tracked by Summit is over 96%. Downtown rental rates average
$1.46 per square foot (psf). To date, the market has largely been
dominated by local players. However, new projects like Georgia-
based Ambling Company’s project on 11th Street may signal a shift. MULTI-FAMILY HISTORICAL OCCUPANCY
Old National Bank is in the process of divesting prime parcels on 97%
Kirkwood which will likely feature a large housing component.
96%
OFFICE
Overall vacancy rate for office stands at 11.3%, down from 12.9% 95%
just one year ago. Newer companies entering the market include
94%
California-based Coupons.com and Virginia-based Cigital. The
largest recent transactions have been relocations: Employment
93%
Plus moved into 21,363 sf in the Finelight Building on Liberty Drive
and IU Health leased 8,000 sf at Johnson Creamery downtown. 92%
Investment sales activity is also showing renewed signs of life.
93%
94%
95%
93%
96%
96%
The Author Solutions single-tenant building sold at slightly over a 91%
2006 2007 2008 2009 2010 2011
10% cap rate and an IU Health medical building sold at ± 8% cap
rate. Meanwhile, the City of Bloomington is planning a mixed-use
development in the downtown Showers Furniture Factory area, a
twelve acre assemblage recently purchased from IU.
MEDICAL OFFICE
OFFICE VACANCY AND RENTAL RATES
Medical office product remains strong with overall vacancy down
to 5.0%. New construction continues with the IU Health building 16%
VACANCY RATE RENTAL RATE
$14.00
on Clarizz plus a senior housing project on Moores Pike. Expect
changes in medical related real estate as practice groups realign 14% $13.50
and healthcare reform changes the landscape. 12% $13.00
10% $12.50
INDUSTRIAL
The industrial market is performing well. Overall vacancy rate 8% $12.00
has bumped down to 7.9%, improving from 8.4% mid-year 2011. 6% $11.50
Over the last few quarters, 18 industrial properties were leased or 4% $11.00
sold. Upland Brewery opened a new 35,761-sf brewing facility on
Profile Parkway and Circle Prosco purchased a 49,056-sf building 2% $10.50
11.3%
12.9%
11.9%
14.5%
5.1%
on Curry Pike. Sunrise Greeting will vacate its 168,000-sf facility 0% $10.00
OVERALL DOWNTOWN EAST WEST MEDICAL
on Vernal Pike year-end. Asking rental rates remained stable across
all product types – manufacturing, warehouse, and flex.
SUMMIT REALTY GROUP l Cushman & Wakefield Alliance
www.SummitRealtyGroup.com 11
12. 2012
MID-YEAR REPORT
Summit Realty Group takes great pride in the accuracy and completeness of our commercial real estate
research. Our Research Team continually compiles property and transactional data; verifies information via
actual field surveys as needed; and updates our extensive, proprietary data platform. This data is critical
to the success of our brokers and clients.
With our culture of shared knowledge among our brokerage team, each specializing in one of the product
types we report on, Summit’s research platform is second to none.
Summit’s Research Team provides statistics, trend analysis, and forecasting of the overall market and
submarkets. We provide clients with both standard and customized analysis to meet specific needs, both
from an overall market aggregate perspective or for a specific project/building purpose. And via the
Cushman & Wakefield platform, we have access to research data of all major U.S. and global markets.
— INVENTORY DATABASE – BUILDINGS & LAND
— AVAILABILITY DATABASE – LEASE, SUBLEASE, SALE
— TRANSACTION COMPARABLES – LEASE & SALE
— TENANT & STACKING PLAN DATABASE
— CONSTRUCTION & DEVELOPMENT TRACKING
— DEMOGRAPHIC & GEOGRAPHIC ANALYSIS
— MARKET COMPARATIVE ANALYSIS
— CUSTOMIZED, PROJECT / SITE SPECIFIC ANALYSIS
— DEMOGRAPHIC & GEOGRAPHIC ANALYSES
Office | Industrial | Land | Retail | Multi-Family | Capital Markets | Corporate Solutions
Property Management | Project Management | Global Supply Chain Solutions | Valuation Services
Economic Incentives Procurement | In-house Market Research | Marketing / Graphic Design
www.SummitRealtyGroup.com 241 North Pennsylvania Street Indianapolis, IN 46204 317.713.2100
