In the fourth quarter of 2024, the Indianapolis industrial market exhibited mixed performance indicators. The overall vacancy rate declined for the first time since 2022 to 10.7%. This improvement is attributed to a slowdown in speculative construction, which limited new supply and helped stabilize vacancy levels. Despite this positive trend, leasing activity softened, with only 1.6 million square feet leased in Q4, marking a 51% decrease from the prior quarter and falling below the two-year quarterly average of 3 million square feet.
The market also experienced a modest positive net absorption in Q4, a significant improvement from the nearly 1 million square feet of negative absorption reported in the previous quarter. However, year-to-date net absorption remained negative at approximately -2.28 million square feet, primarily due to substantial move-outs earlier in the year. Average asking rental rates continued to rise, indicating sustained demand for industrial space despite elevated vacancy rates.
The market also experienced a modest positive net absorption in Q4, a significant improvement from the nearly 1 million square feet of negative absorption reported in the previous quarter. However, year-to-date net absorption remained negative at approximately -2.28 million square feet, primarily due to substantial move-outs earlier in the year. Average asking rental rates continued to rise, indicating sustained demand for industrial space despite elevated vacancy rates.