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Central Indiana’s Industrial Draws Value-Add Investors
As an industrial market, Indianapolis has a lot going for it, including its status as a strong regional distribution hub, an expanding workforce and lower rents than the majority of Upper Midwest metro areas, Marcus & Millichap reported. These factors, along with favorable yields, are drawing investors searching for value-add investments to central Indiana.
Where they’re buying depends on yield requirements. Marcus & Millichap reported that class C warehouses near the city center, particularly along Southeastern Avenue, can net cap rates in the low-8% range. Conversely, institutional investors put their capital into newer assets near Indianapolis International Airport, where initial yields sit in the high-5% to low-6% span.
In the near term, the forecast is for continued investor focus on value-add opportunities located near downtown and in inner-ring suburbs. “Northern, outer-ring suburbs also receive buyer interest as population growth and commercial development intensify in these parts,” according to Marcus & Millichap.
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