The 18-million-square-foot Indianapolis community-neighborhood shopping center market continued to have the seventh highest vacancy rate among the top Reis markets in the second quarter at 14.9%. That was up 20 basis points for the quarter on 36,000 square feet of negative net absorption, but down 20 from a year earlier. The July rate is given as 14.8%. The average asking rent was unchanged during the second quarter at $14.56 psf, with the average effective rent down a penny to $12.48 psf, respectively. The year-over-year rent gain is 0.7% by both measures. There was no change in July.
New supply has been limited in this segment since 2007, but with demand remaining weak a 14.9% vacancy rate is forecast for year-end 2012. Net absorption, however, is forecast to turn positive in 2013 as new supply revives, and the vacancy rate will start to fall. Rent gains are forecast at about half a percent for all of 2012, with a year-by-year improvement to 3.6% asking and 4.5% effective in 2016.
The Indianapolis power center vacancy rate is very high at 9.5%, up 50 basis points during the second quarter though down 100 from a year earlier. At $18.11 psf, the asking rent for power centers is down 1.7% from the prior quarter but up 0.2% from a year earlier. The largest project under construction is still the 239,000-square-foot retail component of the mixed-use Carmel City Center project in Carmel. The project does not have a specific completion date. Five major power center projects are planned with a total of 1.56 million square feet, but no groundbreakings are imminent.
Cassidy Turley reports a second quarter vacancy rate of 7.5% for all types of retail space in metro Indianapolis. Respective rates for neighborhood, community and power centers are given as 11.5%, 11.2%, and 6.5%. The quarter’s net absorption is given at 233,403 square feet.