Market Reports

Indianapolis is experiencing explosive growth in the mid- and big-box grocery store sector. Capitalizing on the consumer trend of active and healthy lifestyles, the metro area has attracted new concepts to the market. Fresh Thyme Farmers Markets will soon join the already healthy and organic offerings of Whole Foods, The Fresh Market and Earth Fare. Although these brands have a smaller footprint than traditional grocers, these specialty gourmet grocers account for seven new stores consuming more than 160,000 square feet of retail space throughout Indianapolis and the suburban markets. This growth in the organic and health food concepts complements the well-care businesses that expanded their presence in the Indianapolis area last year, including Vision Works, Med Express, ATI Physical Therapy and Accelerated Physical Therapy. Consumer demand for convenient access to personal well-care services, such as medical spas, massage therapy, cosmetic dentistry and personal fitness is on the rise. These types of businesses account for a significant amount of absorption within several neighborhood shopping centers throughout the market. In that vein, consumers also are choosing healthier dining options such as grab-and-go prepared foods at their local grocer rather than hitting the fast food drive-thru or dining at a restaurant. This preference …

Activity is picking up in the Indianapolis retail market, buoyed by a strengthening economy that has intensified retail expansion. Positive job growth, escalating new home construction and rising retail sales are attracting new stores and have instigated other retailers to consider additional locations in selective pockets around the metro area. The northern submarkets within Hamilton County are particularly active, especially around Exit 10 of I-69 in Noblesville, where new housing construction has fostered retail growth. In Carmel, the renovation and re-tenanting of The Centre and The Corner are moving forward. The 82nd Street corridor is also lively as the nearly completed expansion of The Fashion Mall has attracted new retailers to the state such as West Elm and Free People. Nearby, last year’s repositioning of Rivers Edge is initiating smaller new developments with Dairy Queen, Wendy’s and Famous Dave’s among the recent openings. The 127,000-square foot project will include an Earth Fare grocery, Walgreens and Panera Bread. Large spaces are being filled across the metro area. Jo-Ann Fabrics is taking 28,000 square feet along Highway 36 and Brickhouse Fitness has penned a lease for 15,000 square feet along Lafayette Road. Although retail construction is at near historic lows, smaller buildings …

Although the Indianapolis retail market took a hit during the downturn, it never sunk as deeply into the doldrums as other U.S. cities, and has been relatively quick to rebound from its modest slide. Maintaining an unemployment rate well below the national average (8.7 percent at year-end 2010), with the prediction of 20,000 new jobs for 2011 ensures this market is headed in the right direction. Retail real estate brokers in this statistical region of more than 2 million were actually quite busy in 2008 and 2009 when most other regions were reeling from the economic crunch. Recognizing still-strong market fundamentals, retailers tried to seize on the doom and gloom of the times to lowball local landlords, who for the most part would not yield to unreasonable rent offers that they knew would tie them up for years to come. While retail vacancies remain low in the city’s most robust retail corridors, they are higher than they were before the downturn began in areas where demographics have shifted. We continue to see a flight to quality in this market with the most attractive, well-positioned shopping centers commanding surprisingly strong rents. For instance, Class A big box rents in highly desirable …