2010 Global Market Report - NAI Commercial Real Estate

Fort Wayne, IndianaIndianapolis, IndianaContactNAI Harding Dahm+1 260 423 4311Metropolitan AreaEconomic Overview2000Population2014 EstimatedPopulationEmploymentPopulationHouseholdAverage Income412,468418,327246,965$59,889The economic climate in the greater Fort Wayne marketdeclined slightly through 2009 with an unemployment ratein the six-county SMSA rising to 9.5%. Fort Wayne continuesto revitalize its downtown. A $30 million baseball stadiumand a 900-space parking garage have been completed, a$35 million Courtyard by Marriott Hotel is currently underconstruction and the $14.5 million residential condominium/retailcomplex is expected to break ground in thenear future.The retail market slowed again in 2009. The strongest majorretail submarkets are on the Dupont and Lima Roadcorridors in the Northern section of the city and along IllinoisRoad in the Southwest section. Orchard Crossing, whichopened in 2008, continues to be a draw, with Target andGoodman’s as anchor tenants along with 26 other possibleoccupants. The Maplecrest Road extension, connecting theNortheast residential markets with New Haven, will be completedby 2012 and should lead to future retail development.The industrial market has seen an abundance of largerfacilities become vacant while the demand for smallerindustrial buildings continues to remain stable. The officewarehouse market continued to be soft throughout 2009.Vacancy rates in this sector are at 15%. There has beenvery little construction in this sector over the past year andvery little is planned for 2010. This will remain the case untilthere are improvements in economic conditions and thefinancial markets.The office market is stable; however, vacancy rates are stillhigh. There is very little construction in the office industry,but the market is experiencing strong growth in medicaloffice space as Parkview Hospital constructs a new regionalmedical center in the I-69/Dupont interchange. BothParkview and Lutheran continue to expand with new medicaloffice buildings on their respective campuses.We project this market will continue to remain status quoover the next few years with unemployment remaining atcurrent levels within the six-county SMSA.ContactNAI Olympia Partners+1 317 264 9400Metropolitan AreaEconomic Overview92008Population2014 EstimatedPopulationEmploymentPopulationHouseholdAverage Income1,746,3731,870,6511,039,590$69,848The Indianapolis metropolitan area achieved high positivenet absorption in the office and industrial markets in 2009.Investment, retail and land sales continued despite adecrease in overall purchases. The Indianapolis populationis growing and employment levels in the area fared betterthan the rest of the state and other metropolitan areas.The industrial market had more medium distribution productconstructed than any other product type. In the past, constructionof modern bulk buildings added the most to overallinventory. This shift to smaller construction is expected tocontinue into 2010. A total of five buildings totaling 828,000SF were delivered to the market in Q3, with 420,000 SF stillunder construction at the end of the quarter. Speculativeconstruction will continue, albeit at a slower rate than in2007 and 2008. Rental rates ended Q3 at $4.46/SF, adecrease over Q2.The office market ended Q3 2009 with a vacancy rate of11.1%. The vacancy rate was unchanged over the previousquarter, with net absorption totaling positive 50,797 SF inQ3. Rental rates ended Q3 at $17.32/SF, an increase overthe previous quarter. Only one building totaling 109,219 SFdelivered to the market in Q3 with 709,591 SF is still underconstruction.The retail sector welcomed new vendors to the market,newly constructed strip centers and shopping centers anda variety of specialty restaurants. Several retailers enteredthe new midfield terminal at the Indianapolis InternationalAirport in Q4. The retail market experienced an increase inactivity by discount retailers in 2008.The economy continues to improve as the employment andpopulation levels both increase. The multi-tenant officemarket continues to expand as inventory grows and the totalnet absorption of space is positive. Investors remaininterested in the industrial market as modern bulk facilitiesare still being delivered throughout the market.MedianHousehold Income$55,798MedianHousehold Income$61,107Total PopulationMedian Age37Total PopulationMedian Age36Fort Wayne At A Glance(Rent/SF/YR) Low High Effective Avg. VacancyDOWNTOWN OFFICENew Construction (AAA)Class A (Prime)Class B (Secondary)SUBURBAN OFFICENew Construction (AAA)Class A (Prime)Class B (Secondary)INDUSTRIALBulk WarehouseManufacturingHigh Tech/R&DRETAILDowntownNeighborhood Service CentersCommunity Power CenterRegional Malls$$$$$$$$$$$$N/A11.005.0012.9514.507.001.002.754.007.005.006.0010.00$$$$$$$$$$$$N/A15.5010.0017.5019.0012.003.005.008.0012.0018.0022.0035.00$$$$$$$$$$$$N/A13.257.5015.2516.759.502.003.886.009.5011.5014.0022.50N/A26.0%27.0%75.0%25.0%23.0%15.0%15.0%50.0%14.0%22.0%15.0%14.0%DEVELOPMENT LAND Low/Acre High/AcreOffice in CBDLand in Office ParksLand in Industrial ParksOffice/Industrial Land - Non-park$$$N/A120,000.0044,000.0065,000.00$$$N/A234,740.00125,000.00130,000.00Retail/Commercial Land$ 175,000.00 $ 1,000,000.00Residential$ 10,000.00 $ 40,000.00Indianapolis At A Glance(Rent/SF/YR) Low High Effective Avg. VacancyDOWNTOWN OFFICENew Construction (AAA)Class A (Prime)Class B (Secondary)SUBURBAN OFFICENew Construction (AAA)Class A (Prime)Class B (Secondary)INDUSTRIAL$$$$$N/A15.0014.0015.0011.0010.00$$$$$N/A19.8317.0024.0023.5020.00N/A$ 16.50$ 15.00$ 18.00$ 20.00$ 17.00N/A10.6%4.9%13.7%14.3%9.9%Bulk WarehouseManufacturing$$3.403.70$$5.503.90$$3.403.5010.0%3.5%High Tech/R&DRETAIL$ 15.00 $ 17.50 $ 16.50 13.4%Downtown$ 8.00 $ 9.50 $ 8.50 9.2%Neighborhood Service CentersCommunity Power CenterRegional Malls$$$5.0010.007.00$$$17.5026.0033.00$ 16.00$ 22.00$ 22.0014.0%10.2%9.1%DEVELOPMENT LAND Low/Acre High/AcreOffice in CBDLand in Office ParksLand in Industrial ParksOffice/Industrial Land - Non-park$$$$784,000.00175,000.0065,340.0042,000.00$$$$196,200.00475,000.00152,460.0081,250.00Retail/Commercial Land$ 300,000.00 $ 1,200,000.00Residential$ 24,829.00 $ 108,900.002010 Global Market Report ■ www.naiglobal.com 90