by Dan Rafter
The Louisville industrial market ended the 2015 on a hot streak, with the year ranking as the best for industrial leases in this market since 2008.
According to data from Cushman & Wakefield Commercial Kentucky, the fourth quarter of 2015 saw more than 1.96 million square feet of industrial leases in the Louisville market. That pushed the total square footage of industrial leases in the Louisville market to more than 6.33 million square feet for the entirety of 2015.
That’s the highest leasing activity in this market since 2008.
At the same time, industrial vacancy rates dropped in the Louisville area, with the fourth quarter industrial vacancy rate falling to a record year-end low of 4.9 percent. That’s down from 5.6 percent for the fourth quarter of 2014.
While all Louisville submarkets are reporting low industrial vacancy rates, three are reporting the lowest vacancy numbers ever recorded by Commercial Kentucky. The East submarket ended 2015 with an industrial vacancy rate of 1.9 percent, while the South submarket’s vacancy rate fell to 4.2 percent and the West/Southwest rate hit 2.3 percent. All of these are the lowest these numbers have been since 1992, when Commercial Kentucky first began tracking the industrial vacancy rate in the Louisville market.
The Louisville market did see several significant industrial lease transactions in 2015, led by Gamestop’s lease of 631,336 square feet in Bullitt County and Derby Industries’ lease of 352,500 square feet, also in Bullitt County.
Louisville also saw several big industrial sales, according to Commercial Kentucky. UBS Realty Advisors purchased 500,918 square feet of industrial space in Bullitt County, while Sparrowhawk purchased 414,028 square feet of industrial space in the South submarket.
Construction completions for the Louisville-area industrial market totaled more than 2.5 million square feet in 2015, the highest this figure has been since 2008. Commercial Kentucky officials say that the pace of industrial construction here doesn’t seem ready to slow. As of the end of 2015, the Louisville market had a total of more than 3.5 million square feet of industrial space under construction with 2016 completion dates.