MIDDLE MARKET HIGHLIGHT, OCTOBER 2006

Bloomington/Monroe County
Dan Marcec

The Bloomington/Monroe County commercial real estate market has seen an uptick in development in terms of stand-alone facilities for national retailers. Examples of this can be found with new stores constructed for Wal-Mart Supercenter, CVS/pharmacy, Bed Bath & Beyond, Dick’s Sporting and Clothing Goods, and LongHorn Steakhouse. In addition, development of small strip centers that include three to four tenants has been a popular trend. Larger commercial structures are planned as part of the 600-acre North Park project, which will be developed at the intersection of state roads 37 and 46.

Throughout Bloomington, vacancy rates for retail/commercial properties are very low, standing at less than 7 percent. In other sectors, the numbers are slightly higher; vacancy rates for office space are estimated at 14 percent, and industrial rates currently check in at 20 percent.

“Commercial vacancy historically has been very low due to the dynamic market, with more than 38,000 students at Indiana University, and the regional nature of the community for employment and shopping,“ says Marilyn Skrivin, vice president of the Bloomington Economic Development Corporation. “Office rates have been average over time, and industrial rates have dropped from a high of more than 33 percent in 2002.”

Significant development has taken place in downtown Bloomington, including the recent completion of a new Hilton Garden Inn as well as new multifamily housing projects that encompass more than 450 new apartment units constructed during the past 2 years. A new Wal-Mart Supercenter opens this month, and there have been a number of stand-alone developments throughout the market, including several at Simon Property’s College Mall that resulted from some demolition and new construction. These projects include Target, Dick’s Sporting and Clothing Goods, LongHorn Steakhouse and Bed Bath & Beyond.

In general, larger commercial development is taking place on the west side of the community, having been directed there by local comprehensive plans. Other development/redevelopment is taking place in downtown Bloomington, and on the east side near the Indiana University campus and the College Mall. Active developers in the area include Simon Properties, Jim Regester and Pinnacle Properties, led by Peter Dvorak.

Indiana University is the largest employer in the Bloomington market, boasting more than 8,000 employees. Bloomington Hospital is the second largest employer with over 3,000 employees. In other sectors, life science and medical products firms also are very active across the board, with major employers including Cook Inc. (2100 employees); Baxter (800 employees); Cook Pharmica (100 employees); as well as several others.

Bloomington’s infrastructure is set up for growth in several areas. According to Skrivin, “Targeted industries include life sciences and information technology; the main reason for this is an educated workforce, as nearly 40 percent of the population aged 25 and older has a bachelors degree or higher. Other targets include advanced manufacturing, education and tourism/recreation.”

Looking toward the future, North Park — the 600-acre mixed-use development located at state roads 37 and 46 — is being developed with a master plan by Crider and Crider. In addition, the retail/commercial market is very strong in Bloomington/Monroe County due to the growth of Indiana University. The continued increases in commuters into Monroe County from the surrounding area for employment, shopping, entertainment and healthcare will continue to have a positive impact on the market.

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