The Calumet Region was sparsely populated marshland south of Lake Michigan until hulking steel mills, oil refineries and factories forever transformed it, bringing opportunity seekers from around the world and concentrating a large population that would become Indiana's second biggest metro area.
An industrial powerhouse that's been compared to Germany's Ruhr Valley, it's made a variety of products including windshield wipers, car bodies, cement, books, golf clubs, munitions, helicopter rotor bearings and of course steel.
Many of the Region's factory buildings were built in the first half of the 20th century. Many of the manufacturers that occupied them have long since vanished like the Budd Company in Gary, Rand McNally in Hammond, McGill in Valparaiso or Anco in Gary, Valparaiso and Michigan City. They left behind older factories that often languished for years but have filled up at a rapid clip in recent years as demand for industrial space has grown in Northwest Indiana.
About 20 years ago, Northwest Indiana had about 10 million square feet of vacant industrial space, but that's shrunk to around 1 million square feet, said commercial real estate agent Lori Tubbs, the owner and CEO of Route 20 LLC.
East Chicago, an industrial hub where as much as 80% of the land was zoned for industrial use, had an industrial vacancy rate of about 50% 20 years ago, said Tubbs, whose family brokered real estate deals in East Chicago for decades. Now that's shrunk to around 5%.
She's brokered deals to bring in new companies to repurpose many older factory buildings, such as at 3600 Michigan Ave., 4245 Railroad Ave. and 425 151st in East Chicago. Much of the demand has come from Illinois companies relocating for lower taxes and costs of doing business but she's also brought in companies from New York, Pennsylvania and California to take over vacant industrial space, like old railroad repair shops or oil tank cleaning facilities.
"State and local economic development officials have been able to attract companies to Indiana with the decline of industry in Illinois. The removal of the inventory tax, more favorable health insurance and the economics caused companies to start moving to East Chicago. But they're also coming from about a dozen other states, including Florida, Texas and California."
Many of the companies that repurposed old factories are steel production or distribution centers like Trinity Steel or Majac Steel. They process steel plates, steel bars or steel coal, such as with an annealing process. They often also do other things related to the steel industry like making the refractory brick for blast furnaces.
"A lot of the real estate in East Chicago was built in the 1940s," Tubbs said. "The buildings have cranes, bays, rail access, everything these companies need."
Refurbishing an existing building is often cheaper than building new, especially as construction costs have climbed.
"It's almost impossible to build what we have with the cost of construction being what it is," she said. "A lot of these users have to move heavy loads with heavy cranes. There's a market to repurpose what's already here. It's certainly financially advantageous to move into these buildings. Back then, they built them to last."
Many companies flock to newer business parks like AmeriPlex at the Port in Portage but some need the older buildings due to the overhead cranes and rail access, Tubbs said.
"There's a lot of heavy manufacturing in north Lake County. That's where most of that activity has occurred," she said.
Overall, Northwest Indiana has a vacancy rate of 4% for industrial property. That's very low compared to vacancy rates of 7% to 9% in surrounding markets, Northwest Indiana Forum CEO Heather Ennis said.
"The new absorption has generally been in the newer buildings as they meet the current market needs more quickly than existing legacy product," she said. "We have seen the influx of large users — 1 million-square-foot Amazon distribution center, 450,000-square-foot Core X Partners facility and the 13 million-cubic-foot United States Cold Storage facility. Lead activity for existing space has slowed a bit due to some market uncertainty but we are still seeing significant outside interest in our market and internal needs from local companies looking to expand."
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