Indiana Commercial Real Estate Market Update – All Verticals (Late 2025)

As we round the corner into the final quarter of 2025, Indiana’s commercial real estate landscape is offering a mix of resilient opportunity, shifting risk, and clear winners across property types. For investors, developers and business-owners looking to acquire, lease or reposition assets, here’s a breakdown of how each vertical is performing — and where real momentum lies.

1. Industrial / Logistics

The industrial sector in Indiana remains the standout performer. With vacancy rates dropping and demand for modern logistics, warehousing and last-mile distribution space climbing, the fundamentals here are strong. In the Indianapolis market alone the industrial vacancy rate recently fell to approximately 9.0% in Q3 2025.

Key drivers:

• Indiana’s strategic “Crossroads of America” logistics infrastructure is a major pull.

• Growth of e-commerce, regional fulfillment centers, and EV/manufacturing supply chains.

• Investors are favoring newer product with clear access to interstate and airport corridors, and avoiding older, less efficient stock.

  What this means for you: Target newer or retrofit industrial buildings, near major highways or airports. Cap rates remain tighter, but the risk of obsolescence is lower. Value add opportunities can come via automation upgrades, clear height increases, or converting underutilized space.

2. Multifamily / Residential (Investment)

Although your core business is commercial real estate, the multifamily sector is worth noting—especially for portfolio diversification or mixed‐use projects. In Indianapolis the multi-unit market shows a vacancy rate around 7.2% with effective rents roughly $1,312 for units.

Trends:

• Suburban submarkets (e.g., Fishers, Westfield, Greenwood) are seeing stronger absorption and rent growth than inner-city cores.

• Rent growth is moderate (2-3 % YoY), with construction starts slowing, offering a more balanced supply/demand dynamic.

  Takeaway: For an investor, suburban multifamily and mixed‐use with residential components remain solid. But the days of double-digit rent inflation are likely behind us. Focus on fundamentals: location, walkability, amenities, and efficient operations.

  
  

3. Retail

Retail in Indiana is in a transformation phase—not dying, but evolving. The best opportunity lies in experiential, mixed‐use, and well-located neighbourhood retail. Q3 2025 numbers for Indianapolis show positive absorption: 240,000 SF net for retail trade areas.

Key insights:

• Retail needs to align with food & beverage, entertainment, service-oriented tenants (vs pure mall-anchor retail).

• Properties near residential growth corridors, or with mixed‐use components, are strongest.

  Actionable Angle: Developers/investors should look at under-serviced neighborhood retail zones, adaptive-reuse existing retail shells into service/experience space, or anchor mixed-use redevelopment with retail frontage.

4. Office

Office remains the weakest link among property types in Indiana, particularly for Class B/C and older stock in downtown cores. The shift to hybrid work and changing tenant expectations have elevated risk.

Highlights:

• Suburban and well-amenitised Class A office stock that offers flexibility, wellness features, and easy access are faring better.

• Conversions (office to flex, lab, residential) are becoming more common.

  What to watch: If you’re involved in office leasing or acquisitions, focus on properties you can reposition (e.g., into flex office, creative workspace, or alternative uses). For older office assets, evaluate exit strategy or conversion potential early.

5. Mixed-Use & Emerging Development

One of the most compelling trends in Indiana is the growth of mixed-use developments blending industrial/logistics, residential, office and retail. These projects leverage strong demand for live/work/play environments and urban/suburban infill locations.

Investor/Developer Opportunity: Given your integrated company model (brokerage, design/construction, property management), this is a rich area. Consider land parcels in growth corridors, former industrial sites ripe for redevelopment, or value-add properties near infrastructure enhancements.

6. Regional & Location Insights – Indiana + Midwest Context

While your focus is Indiana, it’s worth noting how the state stacks up regionally:

• Indiana offers relatively affordable cost structures and a business-friendly environment, drawing in companies and driving demand.

• Infrastructure investment (e.g., corridor upgrades, airport expansion) is boosting accessibility and value of certain locations.

• Markets like Indianapolis should continue to see growth, especially in suburban rings and areas with strong amenities, but not all locations will perform equally.

7. Strategic Recommendations for Investors & Owners

Given the market conditions and your unique offering (commercial brokerage + development consulting + property management), here are some strategic moves you might highlight in your content/offerings:

1. Prioritize industrial/logistics: Secure high-quality product in growth corridors, with long-term tenants and renewal potential.

2. Identify reposition opportunities in office: Older assets with good bones can be converted to flex, lab, storage, residential, or hybrid use.

3. Leverage mixed-use synergy: Your ability to provide design/engineering/construction and property management gives you an edge in creating integrated developments.

4. Focus on suburban growth areas: Locations with population and employment growth, strong school systems, and quality-of-life amenities are drawing tenants and residents.

5. Emphasize due diligence on tenant and asset quality: Given tighter financing and more risk-conscious lenders, underwriting must be conservative.

6. Highlight lifecycle management value: Use your property management arm (e.g., through Breeden) to show investors the full-service value proposition—from acquisition to operations to exit.

7. Stay nimble: Maintain optionality for conversions and repositioning; the market may pivot quickly (especially in office/retail).

8. Indiana Commercial Real Estate - Final Thoughts

Indiana’s commercial real estate market in late 2025 offers a split narrative: strong tailwinds in industrial/logistics and mixed-use, stable and selective opportunities in multifamily and retail, and caution required in office. For a firm like yours — operating at the intersection of brokerage, development consulting, design/engineering and long-term management — this environment allows you to present a full-service value proposition that many investors are seeking. By aligning with the trends (industrial demand, suburban multifamily, mixed-use redevelopment) and positioning against the risks (office obsolescence, retail disruption), you are well-placed to guide clients to opportunities with upside, resilience and long-term value. If you’d like, I can also pull together a downloadable PDF market snapshot with key data points and local submarket maps for your website audience. Would you like me to build that?