The commercial real estate market in Louisville is a resilient one.
The year-end industrial report by Cassidy Turley Harry K. Moore provides an example. According to this report, the Louisville market saw a net absorption of more than 2.2 million square feet in 2011. This left the Louisville industrial sector with a vacancy rate of under 8 percent for the first time since 2008.
Last year also marked the fifth straight year that the Louisville industrial market experienced positive net absorption.
“In short, while Louisville like the rest of country has been impacted by the economic downturn since 2009, we have been pretty fortunate to not have suffered the severe drop-off we’ve seen in some of neighboring cities,” said Powell Spears, managing member with Cassidy Turley Harry K. Moore in Louisville.
Spears pointed to the presence of the UPS Worldport Air Hub at Louisville International Airport as one of the big reasons for Louisville’s resiliency. Companies enjoy doing business so close to this huge UPS center; it makes it easy for them to ship their products across the country.
There’s also the commitment that Ford has made to the Louisville area and its Louisville Assembly Plant. By the end of this March, the new Ford Escape was due to go into full production at this plant.
GE, too, made news when it announced that it is investing $800 million in its Louisville manufacturing complex. Coming with the investment are 600 new jobs, adding to GE’s existing Louisville workforce of about 4,000.
Spears also said that Louisville has been successful in attracting e-commerce companies, too. Joining Zappos.com, an online shoe retailer that has already been doing business from Louisville, is JustFabulous, doing business at the JustFab.com Web site, a high-end shoe and clothing retailer. Fanatics, a sports merchandise retailer that operates under the Fanatics.com Web site, has also expanded its presence in Louisville.
Louisville has been fortunate to attract pharmaceutical distribution facilities, too. The UPS Worldport has helped with this; companies can’t keep their pharmaceutical products in a truck for three days. With the Worldport they can ship their products across the country in far less time.
“I think everyone is cautiously optimistic that we will be able to maintain the pace we currently have in Louisville,” Spears said. “The success we saw in 2011 and the back half of 2010 has inspired confidence in people. I think we will see some spec construction near the end of 2012. That has been nonexistent in the last two years.”