As Region grows, so will demand for commercial amenities
As a commercial real estate broker established in the ever-evolving market dynamics of Northwest Indiana, I’ve had the pleasure of witnessing firsthand the impact new residential developments can have on our area over the past 20-plus years.
It’s not just about building more houses; it’s about the chain reaction that reshapes our communities and alters the commercial real estate landscape.
Let’s start with the obvious: New homes bring with them a surge in demand for services and amenities.
As families move into new neighborhoods, they require access to essential services like grocery stores, pharmacies, restaurants and health care facilities. Suddenly, there’s an influx of commercial developments being built around these neighborhoods, catering to the needs and preferences of the residents.
Look at the impact new housing has had on areas like Crown Point and Schererville over the years.
We used to have large areas of vacant land on U.S. 41 from Main Street to U.S. 30. Over the course of the past 10 years, there is virtually no vacant land left for development. The same can be said about the area just off I-65 and 109th Avenue in Crown Point. Where there was once only farmland, there now are three large medical centers, a large grocery-anchored retail center, hotels and numerous retail centers — with room to grow.
But the impact goes beyond retail essentials and conveniences.
Look at what new housing and growth has done for a town such as Merrillville. We have 2.4 million square feet of speculative industrial distribution centers because AmeriPlex is almost 100% occupied with distribution centers and business.
Because of the increase in population in areas like Crown Point, St. John and Cedar Lake, companies are incentivized to establish or expand their presence in proximity to these new residential growth areas. This not only streamlines logistics and reduces delivery times but also creates jobs and drives demand for commercial real estate space, whether it’s warehouses, distribution centers or last-mile delivery facilities.
Moreover, the ripple effect extends to other sectors as well.
Entertainment venues suddenly find themselves with a larger, more affluent customer base, prompting facilities such as Up Your Alley in Schererville or Urban Air in Hobart to set up shop near these new residential developments. Whether it’s cinemas, theaters or recreational facilities, businesses in the entertainment industry stand to benefit from the influx of residents seeking leisure and recreational options close to home.
The rise of new housing developments also significantly impacts the medical office sector. As residential populations increase, so does the demand for health care services. This creates opportunities for medical practitioners to establish or expand their practices in proximity to these growing communities, leading to heightened demand for medical office space.
Thus, new housing developments serve as catalysts for the expansion of the medical office sector, ensuring residents have access to essential health care services while driving growth and investment in the office sector tailored to medical needs.
For commercial real estate firms, this presents challenges and opportunities. On one hand, it requires us to adapt to a rapidly changing market landscape, where traditional census tracts lag behind or otherwise are inaccurate. We need to provide customized marketing packages to account for these changes.
On the other hand, it literally opens up a world of new clients. Where we once might have seen the majority of clients from the Chicago area, we now are seeing more clients from other countries and states as far as California.
Of course, with every wave of change comes a degree of uncertainty. The rapid pace of development can strain infrastructures like our aging roads, exacerbate traffic congestion such as on Route 41, and place pressure on local government budgets that have property tax caps in place.
As commercial real estate brokers, we have a responsibility to navigate these challenges thoughtfully and responsibly, working closely with local municipalities, developers and community stakeholders to ensure sustainable growth that benefits everyone.
The impact of new residential developments on the commercial real estate market here cannot be overstated. From fueling demand for retail in Schererville, driving investment in industrial demand in Hammond and decreasing vacancy rates for medical office in Munster, the ripple effect of residential growth is far-reaching and transformative.
As commercial real estate brokers, it is our role to embrace these changes, seize the opportunities they present and chart a course toward a more vibrant, dynamic future for our home here in Northwest Indiana.
Read more stories from the current issue of Northwest Indiana Business Magazine.
