The vacancy rate for industrial properties in the Louisville market reached a record low at the end of the fourth quarter, according to CBRE/Louisville, a local commercial real estate brokerage firm.
By John R. Karman III – Reporter, Louisville Business First
Jan 25, 2013
The rate ended 2012 at 4.4 percent, a level not reached since the firm began tracking the market 12 years ago, the company said in its most recent quarterly report.
“Industrywide, 2012 was pretty strong on the industrial side, especially in Louisville,” Tom Sims, vice president of industrial properties for CBRE, said in an interview. “There was pretty strong activity in the market.”
As 2013 gets under way, Sims said, CBRE is tracking “four or five (potential) deals” of 100,000 square feet or greater from companies interested in leasing space near the United Parcel Service Inc. Worldport hub at Louisville International Airport.
But, he said, the number of transactions that could be finalized here might be subject to the limited amount of inventory remaining in the local region.
Few large vacancies remain in market
The only remaining vacancies in the market greater than 300,000 square feet are a 624,000-square-foot distribution center in Bullitt County owned by Welsh Cos., a Minnetonka, Minn.-based commercial real estate firm, and a 450,000-square-foot warehouse at River Ridge Commerce Center in Southern Indiana. It is owned by Louisville’s Crossdock Development Inc.
Crossdock president Lee Wilburn said he has two prospects for his space, and a lease deal is “imminent.”
He declined to provide details.
Sims predicted that “if we can get some buildings up,” 2013 could bring several new tenants to the Louisville market.
A 400,000-square-foot speculative building, which is slated to be open in late May or early June, is under construction at the Louisville Industrial Center on National Turnpike, and several developers are moving forward with plans for other projects in the coming year, as Business First has reported.
Amazon lease sparked absorption
The Louisville industrial market saw 2012 absorption of nearly 2.7 million square feet, including 1.5 million square feet during the fourth quarter, according to the CBRE report.
Much of that absorption can be attributed to the 1 million-square-foot distribution center that Amazon.com Inc. opened in October at River Ridge.