Expansions and growth in the industrial market in Fort Wayne are mirroring national trends as a solid flow of new development projects are pumping energy into this sector of the commercial real estate market. The major economic drivers for northeast Indiana performed well in the most recent quarter, which continued to push vacancy rates down and prices up. In fact, as demand is still well below supply, new properties under construction are expected to continue putting upward pressure on market rents through 2019.
The growth of the industrial sector has primarily been driven by e-commerce and logistics. As shoppers can now purchase anything and everything online, this adjustment in consumer behavior has forced retail property owners to reconsider how their spaces will be filled. On the other hand, it has created opportunities and the perfect storm for the industrial sector. From 2012 to 2017, the percentage of e-commerce sales to the total of U.S. retail sales increased nearly 50 percent1. This is also driving new construction, as nearly one billion square feet of new industrial space has been constructed in the U.S. within the past three years2.
As demand for industrial space continues to outweigh supply, we expect to see an increase in industrial developments in northeast Indiana over the next year. One such example is the new shell building located on Avionics drive. Positioned on a 20.36-acre site near Fort Wayne International Airport, the property is expected to be complete in the last quarter of 2019 and will offer 150,000 square feet with the option to expand up to 240,000 square feet. Developed via a public private partnership between Great Lakes Capital, The Hagerman Group and the City of Fort Wayne, this project is anticipated to promote economic growth in the area.
1 U.S. Commerce Department 2 World Property Journal