The Louisville office market maintained its momentum, recording its second consecutive quarter of positive absorption, according to the latest research from CBRE.
CBRE said that the Louisville office recorded 50,037 square feet of positive absorption in the third quarter of the year.
What’s fueling this absorption? You can credit the suburbs.
CBRE said that all of the quarter’s positive absorption came in the suburbs, which notched 70,301 square feet of absorption in the third quarter. The downtown market, on the other hand, had a more sluggish quarter, seeing 20,264 square feet of negative absorption.
For the overall market, though, the office vacancy rate dropped from 12.6 percent to 12.4 percent. Average market-wide rents rose to $17.63 a square foot, a slight increase of 18 cents.
Class-A office properties in the suburbs accounted for most of the activity in this sector in the third quarter. CBRE reported that these properties recorded 152,705 square feet of leasing.
“Class-A properties continue to drive the majority of leasing activity as tenants are seeking quality,” said David Hardy, managing director in the Louisville office of CBRE. “With more class-A properties under construction and set to deliver in the suburbs, we will likely continue to see this trend as tenants trade up space.”
There weren’t a lot of big office deals during the quarter, but there was one highlight: Agricultural lending cooperative firm Farm Credit Mid-America purchased the 177,000-square-foot office building at 12501 Lakefront Place in Louisville’s East County submarket.