Slowdown in Consumer Spending to Impact Indianapolis Retail Sector

INDIANAPOLIS, IN — Retail market fundamentals in Indianapolis are expected to soften this year as a result of ongoing economic uncertainty and elevated construction activity, according to a third-quarter Retail Research Report by Marcus & Millichap, the nation’s largest real estate investment services firm.

While the local labor market is projected to expand modestly, the slumping national economy and rising food and energy costs have decreased consumer spending, which will likely ease retailer demand through the second half of the year and contribute to a rise in vacancy.

“Out-of-state buyers with extended holding strategies remain the key players in the market and have increased their interest in local multi-tenant assets during the past year, leading to relatively steady cap rates in the low- to mid-8 percent range,” says John Riser, (top right photo) vice president investments in the Indianapolis office of Marcus & Millichap.

Following are some of the most significant aspects of the Indianapolis Retail Research Report:

· Indianapolis-area payrolls are expected to expand by a modest 0.3 percent in 2008 with the creation of 2,800 positions.

· Deliveries are expected to ramp up this year to 2.5 million square feet of retail space, 44 percent above the metro’s five-year annual average.

· Vacancy is forecast to increase 150 basis points to 12.8 percent.

· Asking rents are projected to finish the year at $15.11 per square foot, up 0.5 percent.

· Effective rents will retreat 0.7 percent to $13.41 per square foot this year.

For a copy of the complete Indianapolis Retail Research Report, as well as reports on other markets nationwide, visit our website at http://www.marcusmillichap.com/.

Press Contact: Stacey Corso, Communications Department, (925) 953-1716