David Hardy, managing director at the Louisville office of CBRE, agreed that the hottest market in Louisville today is industrial. Louisville has become a magnet for users seeing to centralize their distribution options, Hardy said.
“We are very much on the radar screen for a lot of the institutional owners,” Hardy said. “We have a good, healthy market for developers here.”
But while the industrial market is fueling the commercial real estate market, Louisville is also taking steps to attract more tourists to the area. That is providing a boost to the region’s restaurant and retailers, Hardy said.
In fact, Louisville is developing a reputation as a foodie town, Hardy said.
“The bourbon craze that has been going on is fueling a lot of tourism and interest in our city,” he said. “That has been a big plus. We also have a very fast-growing urban-housing mentality growing here. We are seeing some very modern, urban ground-up construction for some high-end multifamily projects.”
What brings tourists and new residents to Louisville? Hardy pointed to those new restaurants and retailers, of course. But he also said that the general strength of the city’s downtown core has had a positive impact.
Millennials, Hardy said, are increasingly living and visiting downtown Louisville. There’s a minor-league ballpark here; the University of Louisville’s basketball facility, which also hosts concerts and other events; there are trendy bars; and restaurants that are serving gourmet meals.
“We just have a great downtown,” Hardy said. “Everything we have there is helping to draw a lot of folks downtown who historically not have been people who ever frequented that part of the city.”
As more people head to downtown Louisville, developers are responding. In the Spring of 2018, the high-end Omni hotel will open in the city’s downtown. To Hardy, this project is a key one for the urban core of Louisville.
“That is a real stamp of approval that lures other developers to town,” Hardy said. “There is so much exciting stuff happening around the downtown. It is a lot more appealing environment for the younger workforce. It’s about reversing the brain-drain of our young people getting educated and heading off elsewhere for jobs. More of those efforts are paying off today. The restaurants and nightlife in and around downtown is playing a big role in making Louisville a more attractive city to these young workers.”
The softest commercial market in Louisville right now might be the downtown office sector. Hardy said that this market isn’t struggling, exactly, but it’s not been particularly vibrant in recent years, either. There just aren’t many tenants reserving large swaths of office space in the city’s downtown.
As for the future? Hardy likes what he sees in Louisville.
“I don’t see anything changing dramatically in the near future,” he said. “I think consumers are still active, so the retail market should remain strong. The office market is, overall, healthy. The industrial sector is certainly strong. We are seeing a lot of spec development in industrial. But that has not been an issue in the last several years. Everything that was built was absorbed, more or less. So demand seems solid in Louisville. Everyone is still busy and bullish.”
