The latest Louisville industrial research from CBRE brought mixed news, as rents continued to rise in the second quarter but vacancy rates ticked up, too.
According to CBRE’s second-quarter industrial market report, the average rent for industrial space in the Louisville market rose $0.07 a square foot to $3.51.
But even though the market saw a positive net absorption of 655,428 square feet, the vacancy rate here rose to 7.7 percent. The reason for this? Developers delivered 1.5 million square feet of speculative industrial construction during the quarter, and that space has yet to be filled.
Don’t expect the pace of spec construction to slow in this market, either. CBRE reported that developers are expected to deliver another 1.3 million square feet of speculative industrial space to the Louisville market in the second half of this year.
“There is strong demand for new product, and we expect this new space to be absorbed quickly,” said Tom Sims, senior vice president in CBRE’s Louisville office, in a statement. “The fundamentals are very strong right now, and developers are attempting to capitalize on this.”
According to CBRE’s research, the amount of industrial space under construction in the Louisville market increased to 5.1 million square feet during the second quarter. Year-to-date, industrial absorption here is now at 1.28 million square feet.
In one of the key transactions during the quarter, DCT Industrial sold three buildings totaling 609,396 square feet to GLP US for $27 million.