Over the past three years Louisville-metro’s vacancy rate for commercial properties has gone down from 8 percent to 4 percent for the most recently measured quarter, the second quarter of 2014.
These statistics were compiled by the CBRE U.S. Research Team, which provides real estate market research, and economic forecasting.
The Louisville-metro area also includes southern Indiana. On the whole 594,841 sq. ft. were absorbed for the quarter. Some large leases led the way: a 218,000 sq. ft. lease by Tower Automotive in Bullitt County, a 150,000 sq. ft. lease by Tenneco on Trey Street in southern Indiana, and a 119,000 leased to a confidential client in the Bluegrass submarket.
Large sales also took place. Becknell bought two assets that totaled over 400,000 sq. ft, in the Riverport, and Exeter acquired 450,000 sq. ft. in southern Indiana.
In total, three of the seven biggest deals took place in southern Indiana.
Vacancy rates varied widely across the various sectors of the market. Bullitt County has a 9.9 percent vacancy rate, the highest, with downtown Louisville second-highest at 5.3 percent. Mickey Semegen, research coordinator at CBRE, said the vacancy rate for downtown Louisville stood at 7.6 percent at the end of 2013. The difference between the two eras came not from substantive change in the market, but because CBRE removed some buildings that had environmental issues and were, in her words, “non-tenantable.”
The tightest markets were the Bluegrass area at 0.4 percent, and then the Northeast market at 0.5 percent.
New unemployment rates also were released, showing that Louisville is faring better than the state at large, but still lagging national rates. The Louisville area unemployment rate is 7 percent, while Kentucky’s is 7.7 percent. The national rate is 6.1 percent. Louisville’s rate is down from the 8.1 percent from the first quarter of 2014.
“With the number of prospective tenants looking for space, we anticipate that the overall vacancy rate will not increase measurably anytime soon,” CBRE wrote in its report.