Industrial real estate construction in northeast Indiana is on the upswing, according to a study released Tuesday.
The Zacher Co. annual market survey pointed to the General Mills Inc. cereal distribution center as a major reason why the region experienced a jump in new construction. The $36 million building on Bluffton Road opened last September with a gold certification for energy efficiency from the U.S. Green Building Council.
The center spans 1.5 million square feet and is the largest of its kind in North America to achieve the environmental recognition, government officials said. The development promised to create at least 65 jobs.
Another noteworthy project was Vera Bradley Inc.’s completed investment of $22.2 million with up to 124 new jobs as the company nearly doubled its distribution center in Roanoke.
Northeast Indiana saw 3.5 million square feet of industrial real estate constructed last year, compared with 1.5 million square feet in 2011.
The annual Zacher study examines Adams, Allen, DeKalb, Huntington, LaGrange, Noble, Steuben, Wabash, Wells and Whitley counties. The area has 98.3 million square feet of industrial space. Of that total, 6.7 million square feet of space – or nearly 6.85 percent – was vacant as of January this year. That’s slightly higher than the 6.6 percent of space vacant in January 2012.
President Steve Zacher said optimism should still be tempered. Moving into existing buildings might be the preferred route for some industrial developers, but we don’t have a lot of available space, so they had to build.
This is really the continuance of a three-year rebound from the extremely depressed conditions experienced in 2008 and 2009, he said.
Companies were reluctant to make long-term commitments due to economic uncertainties including the election, the fiscal cliff debate in Washington, and economic turmoil in Europe, the survey report said.
As for this year, the survey’s authors predict speculative development will return to the market due to the lack of high quality available buildings for sale or lease. These developments will be aided by governmental incentives.
We expect sale prices and lease rates will increase in 2013, the report said.
Zacher and its affiliate, CORFAC International, base their information on a compilation of data from many sources, including broker listings, information from websites, mailings and industry knowledge.