An in-depth look at the Louisville industrial market. Analysis includes leasing, sales, construction, and employment.

1. Industrial
Outlook
An in-depth look at the
Louisville industrial market.
Analysis includes leasing,
sales, construction and
employment.
Louisville | Q1 2019
JLL Research

2. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
Q1 2019
Insight
Louisville Industrial Outlook
The year is off to a strong start as the pace of absorption in 2018 continued
into 2019 with over 2.1 million square feet absorbed. Two buildings totaling
nearly 868,000 square feet were leased in the Airport submarket. Ford
leased the remaining 302,000 square feet of the building at 10301 Air
Commerce Drive, after initially taking down 370,000 square feet last fall.
Hydra made the largest lease of the quarter, taking the 505,000-square-foot
Exeter building in River Ridge.
As expected, speculative construction completions slowed significantly to
start the year as development tapered off in mid- to-late 2018. However,
announcements have picked back up with Browning planning a 925,000-
squre-foot building in Bullitt County, Exeter planning a 561,600-square-foot
building in Southern Indiana, and Main Street Realty planning a 331,000-
square-foot building in the Airport submarket.
This quarter was also active on the investor side with 3208 E. Blue Lick Road
transferring to Dream Industrial REIT and 857 Park Loop Road transferring to
Colony Capital. Both acquisitions were part of larger portfolio packages.
Louisville remains a desirable location for institutional investors who have
been priced out of larger markets, with several buildings currently under
contract providing attractive returns for investors.
Outlook
The pace of absorption over the past 12-months has been historic for
Louisville with over 7.0 million square feet leased. The surge in absorption
has ignited interest in speculative development opportunities. Given the
current availabilities and development announcements, there continues to
be intriguing options for users evaluating the Louisville market.
Fundamentals Forecast
YTD net absorption 2,157,300 s.f. ▼
QTD net absorption 2,157,300 s.f. ▼
Under construction 3,470,640 s.f. ▼
Total vacancy 7.02 % ▼
Average asking rent (NNN) $3.95 p.s.f. ▲
Tenant improvements Falling ▼
0
4,000,000
8,000,000
2015 2016 2017 2018 2019
Supply and demand (s.f.) Net absorption
Deliveries
Absorption remains strong as vacancy continues to fall
5.7%
8.7%
11.7%
9.4%
7.0%
2015 2016 2017 2018 2019
Total vacancy
$3.20
$3.40
$3.60
$3.80
$4.00
2014 2015 2016 2017 2018 2019
Average asking rents ($/s.f.)
© 2019 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
Top trends and activity
• Dream Industrial REIT and Colony Capital entered the Louisville market
in Bullitt County, as part of separate portfolio packages.
• Two buildings totaling over 850,000 square feet in the Airport submarket
were leased.
• Modern bulk vacancy dipped to 7.02 percent, the lowest mark since
2015.

3. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
Inventory
(s.f.)
YTD
total net
absorption
(s.f.)
YTD
total net
absorption
(% of inventory)
Total
Vacancy (%)
Average
total asking
rent
($ p.s.f.)
YTD
completions
(s.f.)
Under
construction
(s.f.)
Airport 24,121,751 1,289,500 5.3% 3.6% $4.11 129,000 468,000
Bullitt County 13,647,026 0 0.0% 10.2% $4.09 0 572,000
East 5,850,720 0 0.0% 0.0% $5.95 0 150,040
Riverport 12,557,133 362,800 2.9% 9.2% $3.56 230,000 0
Southern Indiana 10,216,172 505,000 4.9% 12.2% $3.85 0 2,280,600
Louisville Totals 66,392,802 2,157,300 3.2% 7.2% $3.95 359,000 3,470,640
Analyzes all industrial buidings greater than 100,000 s.f. with a minimum clear height of 24'
2,234,648
1,934,181 2,059,001
2,742,889
3,029,702
3,843,783
2,568,298
5,710,124
2,157,300
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
2011 2012 2013 2014 2015 2016 2017 2018 Q1 2019
Q1 2019
Statistics
Louisville Industrial Outlook
9.2%
8.3%
7.2%
6.6%
5.7%
8.7%
11.7%
9.4%
7.0%
2.0%
5.0%
8.0%
11.0%
14.0%
2011 2012 2013 2014 2015 2016 2017 2018 Q1 2019
© 2019 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
Total Vacancy Rate %
Total Net Absorption
Inventory
(s.f.)
YTD
total net
absorption
(s.f.)
YTD
total net
absorption
(% of inventory)
Total
Vacancy (%)
Average
total asking
rent
($ p.s.f.)
YTD
completions
(s.f.)
Under
construction
(s.f.)
Airport 24,121,751 1,289,500 5.3% 3.6% $4.11 129,000 468,000
Bullitt County 13,647,026 0 0.0% 10.2% $4.09 0 572,000
East 5,850,720 0 0.0% 0.0% $5.95 0 150,040
Riverport 12,557,133 362,800 2.9% 9.2% $3.56 230,000 0
Southern Indiana 10,216,172 505,000 4.9% 12.2% $3.85 0 2,280,600
Louisville Totals 66,392,802 2,157,300 3.2% 7.0% $3.95 359,000 3,470,640
Analyzes all industrial buidings greater than 100,000 s.f. with a minimum clear height of 24'

4. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
$187,037,809
10
$68
5.75%-6.25%
98.5%
2.5%
Top sales transactions last 12 months
Size (s.f.) $ p.s.f. Sale date
2621 Technology Drive WPT Industrial REIT WPT Capital Advisors 224,000 $17,900,000 $80 Sep-18
120 Velocity Way Granite Capital Browning 721,000 $68 Dec-18
7251 Logistics Drive Paul & Eleanor Sade Trust Panattoni 356,000 $66 May-18
250 Hilton Drive GLP Van Trust 592,800 $38,400,000 $65 Apr-18
857 Park Loop Road* Colony Capital Dermody 546,000 $26,489,801 $47 Feb-19
Dream Industrial REIT Transwestern 302,500 $13,491,668 $45 Feb-19
1234 Gardiner Lane GSK Properties 162,000 $4,610,000 $28 Dec-18
Sales price $
12 month sales volume $ by submarket
$48,696,340
*Purchased as part of portfolio
Dry Ridge Capital
$23,500,000
3208 E. Blue Lick Road*
Building address Buyer company
Transactions details
Seller company
Average Class A sale price p.s.f.
12 month transaction volume at a glance
Total volume
Number of transactions
Average Class A cap rate
Sales activity by building type last 12 months
Warehouse/Dist. sales volume as % of
total
Manufacturing sales volume as % of
total
Top sellers (s.f.)Top buyers (s.f.)
$182,287,809
$4,750,000
0 s.f.
500,000 s.f.
1,000,000 s.f.
1,500,000 s.f.
2,000,000 s.f.
2,500,000 s.f.
3,000,000 s.f.
3,500,000 s.f.
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
Warehouse / Distribution Manufacturing
Sum of Price ($) Sum of RBA (SF)
20%
16%
15%13%
10%
8%
6%
Granite GLP
Colony Capital Sazerac
Paul & Eleanor Sade Trust Dream Industrial REIT
WPT Industrial REIT GSK Properties
Sperber Familly Trust Greif
20%
16%
15%13%
10%
8%
6%
Browning Van Trust
Dermody New Mill Capital Holdings
Panattoni Transwestern
WPT Capital Advisors Dry Ridge Capital
Atalaya Investments Alemap
$88,677,809
$43,150,000
$27,200,000
$17,900,000
$10,110,000
Bullitt County
Southern Indiana
Riverport
East
Airport
Q1 2019
Sales
Louisville Industrial Outlook
This report analyzes all industrial sales > 75,000 s.f. year-to-date
© 2019 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
$187,037,809
10
$68
5.75%-6.25%
98.5%
2.5%
Top sales transactions last 12 months
Size (s.f.) $ p.s.f. Sale date
2621 Technology Drive WPT Industrial REIT WPT Capital Advisors 224,000 $17,900,000 $80 Sep-18
120 Velocity Way Granite Capital Browning 721,000 $68 Dec-18
7251 Logistics Drive Paul & Eleanor Sade Trust Panattoni 356,000 $66 May-18
250 Hilton Drive GLP Van Trust 592,800 $38,400,000 $65 Apr-18
857 Park Loop Road* Colony Capital Dermody 546,000 $26,489,801 $47 Feb-19
Dream Industrial REIT Transwestern 302,500 $13,491,668 $45 Feb-19
1234 Gardiner Lane GSK Properties 162,000 $4,610,000 $28 Dec-18
Sales price $
12 month sales volume $ by submarket
$48,696,340
*Purchased as part of portfolio
Dry Ridge Capital
$23,500,000
3208 E. Blue Lick Road*
Building address Buyer company
Transactions details
Seller company
Average Class A sale price p.s.f.
12 month transaction volume at a glance
Total volume
Number of transactions
Average Class A cap rate
Sales activity by building type last 12 months
Warehouse/Dist. sales volume as % of
total
Manufacturing sales volume as % of
total
Top sellers (s.f.)Top buyers (s.f.)
$182,287,809
$4,750,000
0 s.f.
500,000 s.f.
1,000,000 s.f.
1,500,000 s.f.
2,000,000 s.f.
2,500,000 s.f.
3,000,000 s.f.
3,500,000 s.f.
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
Warehouse / Distribution Manufacturing
Sum of Price ($) Sum of RBA (SF)
20%
16%
15%13%
10%
8%
6%
Granite GLP
Colony Capital Sazerac
Paul & Eleanor Sade Trust Dream Industrial REIT
WPT Industrial REIT GSK Properties
Sperber Familly Trust Greif
20%
16%
15%13%
10%
8%
6%
Browning Van Trust
Dermody New Mill Capital Holdings
Panattoni Transwestern
WPT Capital Advisors Dry Ridge Capital
Atalaya Investments Alemap
$88,677,809
$43,150,000
$27,200,000
$17,900,000
$10,110,000
Bullitt County
Southern Indiana
Riverport
East
Airport

5. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
Total leased at delivery (%) 2.7%
Total speculative at delivery (s.f.) 2,436,815
Total BTS at delivery (s.f.) 481,000
Total owner-user at delivery (s.f.) 1,300,000
Total # of properties delivered 11
Asking rental rate (low - high) $4.25 - $5.50
Largest projects delivered past 12 months
Building/Address RBA (s.f.) Delivery date
Leased at
delivery (%)
W.W. Grainger 1,300,000 Q3 2018 100%
10301 Air Commerce Drive 677,685 Q2 2018 0%
300 Hilton Drive 506,117 Q3 2018 0%
4500 Fern Valley Road 350,000 Q3 2018 0%
2349 E. Millers Lane 251,000 Q4 2018 100%
101 Lewman Way 250,000 Q4 2018 0%
Total pre-leased (%) 25.0%
Total speculative under construction (s.f.) 1,583,640
Total BTS under construction (s.f.) -
Total Owner-user under construction (s.f.) 1,887,000
Total # of properties UC 8
Asking rental rate (low - high) $3.90 - $4.15
Largest projects currently under construction
Building RBA (s.f.) Delivery date Pre-leased (%)
Salt River Business Park 572,000 Q3 2019 0%
Exeter River Ridge 561,600 Q4 2019 0%
Logistics River Ridge 469,000 Q2 2019 100%
Premier Packaging 318,000 Q2 2019 100%
Eastpoint Business Center B 150,040 Q1 2019 21%
Speculative
Speculative
Owner-user
Submarket
Under construction
3,470,640
Under construction (s.f.)
Under construction in-depth
Upcoming deliveries by year (s.f., excludes YTD completions)
Southern Indiana Gray Speculative
New and historical deliveries
Completions in-depth
4,217,815
Total delivered past 12 months (s.f.)
Construction typeOwnerSubmarket
Airport
Airport
Southern Indiana
Airport
Airport
Advance Distribution Services
The Schroering Co.
Exeter Property Group
Molto
W.W. Grainger
BTS
Speculative
East
Airport
Southern Indiana
Southern Indiana
Bullitt County
Speculative
Owner-user
Owner Construction type
Owner-user
Boland
Premier Packaging
Niagara Bottling
Exeter Property Group
Crossdock Dev.
Speculative
Speculative
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
2012 2013 2014 2015 2016 2017 2018 2019
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
2019
Owner-user Speculative
Q1 2019
Construction
Louisville Industrial Outlook
This report analyzes all industrial developments under construction & new deliveries > 100,000 s.f.
© 2019 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.

6. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
Q1 2019
Construction
Louisville Industrial Outlook
1
Location: 100 Velocity Way
Square feet: 925,000
Tenant(s): None
Landlord: Browning
1
2
Address: 4301 Produce Road
Square feet: 318,000
Tenant(s): Owner-user
Landlord: Premier Packaging
2
3
Location: 350 Hilton Drive
Square feet: 561,600
Tenant(s): None
Landlord: Exeter
3
4
Address: Logistics Avenue
Square feet: 469,000
Tenant(s): Owner-user
Landlord: Niagara Bottling
4
© 2019 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.

7. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
22%
15%
13%12%
11%
10%
7%
Trade, Transportation & Utilities
Educational & Health Services
Professional & Business Services
Manufacturing
Government
Leisure & Hospitality
Financial Activities
Mining, Logging & Construction
Other Services
Information
Q1 2019
Employment
Louisville Industrial Outlook
3.8%U.S. unemployment
1.7%U.S. 12-month job growth
4.0%Louisville unemployment
1.0%Louisville 12-month job growth
4.1%Kentucky unemployment
1.1%Kentucky 12-month job growth
-3.0
2.0
7.0
12.0
17.0
22.0
2014 2015 2016 2017 2018
Trade, Transportation & Utilities Manufacturing
Other Services Mining Logging & Construction
0%
4%
8%
12%
400,000
500,000
600,000
700,000
800,000
2014 2015 2016 2017 2018 2019
Employment Unemployment
Employment vs. unemployment rate
Employment by industry
Job growth (12-month change)
-2,600
-2,200
-500
-400
100
600
900
2,100
2,600
6,300
-4,500 -2,500 -500 1,500 3,500 5,500 7,500
Leisure & Hospitality
Other Services
Financial Activities
Information
Professional & Business…
Government
Trade, Transportation & Utilities
Manufacturing
Mining, Logging & Construction
Educational & Health Services
Job growth*
Historical employment Job growth by sector*
Employment by industry Industrial employment*
* Represents 12-month change in employment. All charts represent the latest economic data available from the Bureau of Labor Statistics as of September 2018.
© 2019 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
-1.0%
-0.3%
0.4%
1.1%
1.8%
2.5%
3.2%
3.9%
2015 2016 2017 2018
Louisville U.S.

8. Andrew Batson
Vice President, Director of Research
+1 216 937 4374
andrew.batson@am.jll.com
Alex Westcott
Research Analyst
+1 502 394 2504
alex.westcott@am.jll.com
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© 2018 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.