Third-Party Logistics Providers Account for Most Big-Box Warehouse Leasing Activity in Indianapolis

Third-party logistics (3PL) providers leased more big-box warehouse space in Indianapolis last year than any other occupier type, retaining their leading position and accounting for 38% of all transactions, down from 76.2% in 2022. Retailers and wholesalers increased their second-ranked share in Indianapolis from 13.4% in 2022 to 33.7% in 2023.

Indianapolis also saw over 40 million sq. ft. of industrial space completed in 2023, a new record for the market and second only behind Dallas-Fort Worth’s 53.1 million sq. ft. As a result of this large increase in construction, the overall vacancy rate rose from 5.8% in 2022 to 11.6% in 2023, with CBRE forecasting vacancy rates returning to 2022 levels by 2025 or later.

“While Indianapolis has seen a large increase in retailers and wholesalers leasing big-box warehouse space over the past year, the city continues to retain its position as a vital market for 3PLs due to its strategic location which grants access to over 43 million people within 250 miles, the 580-plus local economic development incentives introduced in the past five years and its robust highway, railroad and airport intersection network,” said CBRE’s Jared Scaringe, Executive Vice President in Indianapolis.

North American Trends

Overall, general retailers and wholesalers leased the most big-box warehouse space in North America in 2023, accounting for 36% of all transactions, according to a new report from CBRE. Retailers and wholesalers dethroned last year’s top occupier category, third-party logistics (3PL) providers.

In addition to retailers & wholesalers, automobiles, tires & parts and building materials & construction also saw an increase in share of leasing activity, which overall fell 15.8% in 2023.

Industrial construction activity peaked in 2023, with a record 413 million sq. ft. delivered to the market, causing a doubling of the vacancy rate to 6.6%. However, construction in progress dropped to 208.4 million sq. ft. by year end, half of the previous year's total.

CBRE forecasts a 5% increase in big-box leasing volume in 2024 as current market conditions are favorable to tenants. This indicates a potential rebound in demand, as the market strives to catch up with the robust deliveries of newly constructed industrial spaces.

Of the leasing activity that took place, demand was driven primarily by a desire to boost supply chain resilience, increase access to growing population centers, modernize space to accommodate increased automation and support continued e-commerce growth.

North America’s Top 25 Core Markets

CBRE’s report examined 25 big-box markets in North America. The top 10 markets in North America, ranked by square feet leased, were:

2023 Lease Transaction Volume

To read the full report, click here.