Indiana, overall, is a bright spot in the generally blighted rust belt. Indiana is one of the more populous states in the country, and many of those people reside in Indianapolis, the state's capital and largest city. Indianapolis has almost 800,000 residents, making it the 12th largest city in the country and the third largest in the Midwest. However, portions of the northwestern part of the state lie in the Chicagoland area, so it is heavily populated, too. Gary, Indiana (lyrically immortalized in the musical The Music Man) is located in this area and has a little over 100,000 residents, over 80% of whom are African American.

The northwest Chicagoland area, particularly, is primed for industrial growth and development. The growth mostly stems from the area's proximity to Chicago, which is still the major inland port in North America. The growth is occurring in Indiana as opposed to Illinois because Indiana has lower labor costs and because the state is offering significant incentives such as a 10-year property tax abatement program and foreign trade zone status. The market is heavily weighted towards warehouse and distribution centers rather than manufacturing.The industrial market in Indianapolis is also strong, with submarkets focused on manufacturing and distribution. New industrial construction and development is underway in the Indianapolis area.


The commercial real estate market in Indianapolis, generally, is strong. The retail market is vibrant, as new businesses open in the downtown area. A major mixed use development is underway in downtown Indianapolis. Included in the plans are a full-service hotel, a 5,000-seat theater, hundreds of condos and more than a million square feet of office and retail space. The developer hasn't released cost estimates, but has expressed little concern over what are surely enormous development costs. The downtown Indianapolis area is prime, but underused, real estate. Like much of the retail development in Indiana, this project is a rehabbing of old retail property, not new construction.

The retail renaissance in downtown Indianapolis has not come cheaply. Over the past 15 years, more than $6 billion of public and private funds have poured into the downtown area. When all the projects are done, the total cost for redevelopment is estimated to have costed over $9 billion. Even so, downtown Indianapolis is rated as the third most cost-effective place in the nation for business development. Retail and leisure spending in the downtown area has increased by almost 300% in the last five years.