The Louisville industrial market began 2016 on a positive note, with an overall vacancy rate of just 4.9 percent as 2015 drew to a close and 3.6 million square feet of new industrial space under construction.
And that’s just a sample of the good news from Cushman & Wakefield Commercial Kentucky’s fourth quarter Louisville industrial report.
Commercial Kentucky pointed to several reasons for Louisville’s healthy industrial market. For one thing, the Louisville area ended 2015 with an unemployment rate of 4.2 percent, below the national average. At the same time, Louisville is benefiting from the boom in online retail sales. The region benefits from the UPS Worldport hub at Louisville International Airport, which is the largest fully automated package-handling facility in the world.
This facility handles packages from 130 aircraft every day and 1.6 million parcels every 24 hours. Such an efficient operation is a key draw to businesses that need to deliver their products quickly to online customers across the nation.
It’s little surprise, then, that FedEx is expected to open a 300,000-square-foot distribution center in the Louisville market by the second quarter of 2016. This facility will create 650 to 700 jobs.
Both Ford Motor Company and General Electric are also providing a boost to Louisville’s industrial market, according to Commercial Kentucky. Both Ford plants in the Louisville market — the Louisville Assembly Plant and Kentucky Truck Plant — will see the launch of new vehicles, including the 2017 Ford Escape and the 2017 Super Duty truck. General Electric recently announced that China’s Haier Group will acquire its appliance division based in Louisville for $5.4 billion in an all-cash transaction. Many observers say that this move bodes well for Louisville and the 6,000-strong workforce at GE’s Appliance Park.
Commercial Kentucky reported that the Louisville industrial market saw fourth-quarter leasing activity of more than 1.9 million square feet, pushing the area’s year-end total to 6.3 million square feet. That represents the highest year-end activity here since 2008.
According to Commercial Kentucky, nearly 70 percent of the year’s leasing activity came from the South, Bullit County and Southern Indiana submarkets. Warehouse/distribution accounted for 84 percent of the total fourth-quarter leasing activity, according to the report.
The fourth-quarter absorption of 1.3 million square feet of industrial space brought the year-end total to nearly 3 million square feet, the highest reported since 2008, according to Commercial Kentucky.