Demand driving new industrial parks, but issues remain
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The vice president of development for Missouri-based VanTrust Real Estate LLC says demand from e-commerce and manufacturing companies is driving the need for more industrial space in the Indianapolis market. The commercial real estate firm this week announced plans to invest $220 million to establish new industrial parks in Hendricks and Hancock counties. However, Phil Rasey says challenges caused by the supply chain have made it more difficult for developers to build.
In an interview with Inside INdiana Business, Rasey discussed the demand for projects and how VanTrust is trying to overcome the challenges.
“Indianapolis has a lot of great demand drivers, you know, with FedEx and great labor pool and having [I-70] run right through the city. So it’s always been a prime kind of distribution market from that standpoint,” said Rasey. “We’re seeing a lot of activity from e-commerce users. We’re actually seeing a lot of manufacturing users. Both our buildings would be spec industrial buildings, but [with] all the spec that we’re doing in the entire region, we are seeing a lot of demand for manufacturing.”
Ground has already been broken on the first building in the Avon Landings Commerce Park. The $30 million, 330,240-square-foot facility is expected to be complete in early 2023 with two more buildings to follow.
VanTrust plans to break ground later this month on a $67 million, more than 800,000-square-foot building in the Air 70 Logistics Park in Mount Comfort, which will also be followed by two additional buildings.
Rasey says the Avon park will focus on smaller, higher-end industrial tenants, while the Air 70 park will target larger bulk distribution customers.
But Rasey says the developer has had to pivot its strategy to get the materials it needs to construct these types of buildings as the supply chain crisis continues.
“You’re waiting a long time for roof materials, transformers, dock equipment,” he said. “We’re preordering a lot of materials. You’re ordering a lot of those materials almost as soon as you’re buying the land. Even doing that, you’re still running into delays of getting those products.”
Rasey says the goal is to fill up the first buildings in each industrial park as soon as possible and then begin work on the remaining buildings in each park’s first phase. He says if the market is still strong, VanTrust plans to move forward with additional phases at each location.
“Building two big parks in two separate sides of Indianapolis, gives us some runway to pursue build-to-suits, pursue different types of users and gives us two good land positions, and some flexibility to respond to what the market needs.”