A glimmer of hope? That’s what JLL has found in at least one office market across the country. In its fourth quarter office outlook for Louisville, JLL reports that the final three months of the year saw something unusual: positive net absorption for the local office market.
This is unusual because the COVID-19 pandemic has hit the office sector so hard. In markets across the United States, businesses are struggling to determine when to bring their employees back to the office. And they’re wondering, too, whether to bring these workers back on a full-time basis or on a type of hybrid schedule.
The Louisville market isn’t an exception. As JLL reports, return-to-office dates by major Louisville employers have been pushed back multiple times. But in this market, at least, this has also led to opportunities for smaller- and moderate-size companies. These smaller companies are finding that they can now get into office space that in normal times would have been too expensive for their budgets.
This might help explain that glimmer of hope in the Louisville office market. According to JLL’s report, the fourth quarter saw positive net absorption for the office market for the first time in 2021.
Another positive sign? Stoll Keenon Ogden announced that it will from 500 W. Jefferson to the 400 W. Market skyscraper in the Louisvile CBD. The company has now committed to the CBD through the year 2035 with a long-term lease of 41,698 square feet at its new location.
The GSA has now filled the entire 38,959-square-foot building at 1631 Lyndon Farm Court in Louisville, while Baird consolidated suburban locations into one 34,388-square-foot floor in Fenley’s Two Olympia Park Plaza office development in Jefferson County, Kentucky.
The picture for the entire year of 2021, though, was not as positive. The Louisville office market saw negative absorption of 194,007 square feet last year and a total office vacancy rate of 13.2 percent.
And as for the future? There’s still plenty of uncertainty in Louisville’s office market. But in its report, JLL struck an optimistic tone, saying that multiple users are now hoping to capitalize on new office-space opportunities in Louisville’s CBD.