Does your office have a Zen garden? How about an onsite health clinic? If you work in the center of Louisville, you might already be enjoying these perks.
In cities across the Midwest, the owners of office buildings are shelling out big dollars to modernize their facilities. They aren’t doing this out of a desire to own the coolest buildings in town. They need modern perks to lure the top tenants. And these tenants? They need to set up shop in office properties that offer high-end fitness centers, bike storage spaces and expansive rooftop decks if they want to attract and retain the best workers.
This has led to a modernization boom in office markets across the Midwest. Louisville is a good example.
According to JLL, 75 percent of the Class-A office towers in Louisville’s central business district have undergone amenity upgrades or are ready to start renovation projects.
What are these upgrades bringing to Louisville office towers? JLL says that features like Zen gardens, onsite health clinics and indoor living areas are popular. Other amenities include onsite cafes, tech-focused conference centers and plenty of bike storage.
JLL has tracked seven Louisville office buildings that have undergone amenity upgrades since 2015. According to JLL, the average amenity package came in at $1.8 million. Buildings that updated have seen a increase of 10.2 percent in their occupancy levels since their upgrades.
“Current tenants and those looking to relocate are intrigued by the high-quality spaces within the Louisville market,” said Doug Owen, senior vice president with JLL. “Louisville’s recent modernization efforts combined with comparatively low rental rates make this city a unque opportunity for investors.”
The office market in Louisville is growing, too. JLL reports that nearly 400,000 square feet of office space is under construction here. The CBD and suburban office markets in the Louisville area saw positive net absorption of 342,744 square feet in the second quarter.
In a significant move during the second quarter, the Gateway to NuLu announced full occupancy of its 75,000-square-foot office building after Lodgic Everyday Communities, El Toro and Edj Analytics signed leases at the property.