Year-to-date leasing activity surpassed the 2015 total in the third quarter, a positive sign for market. As the long-awaited East End Bridge nears completion, developers are looking to acquire land along the newly-opened access points as activity shifts to the northeast. In addition, four projects were announced in the third quarter total over 300,000 square feet of proposed speculative space as developers remain bullish on the market.

1. CBD Vacancy Forecast
Source: JLL Research
Office construction deliveries (s.f.)
Source: JLL Research
Recently announced projects
Source: JLL Research
Property Bldg s.f. Acres
Jefferson Development – Old Henry 160,000 107
Jefferson Development – Lexington Road 100,000 22
Schroering Co. – Eastpoint 32,500 3.4
Evergreen Real Estate – Anchorage 10,800 4.6
Consolidations grow CBD employment, raise vacancy rates
Humana’s second quarter announcement was another win for the Central
Business District as over 1,000 employees will relocate downtown from the
suburbs. However, PNC’s announcement that it will vacate PNC Plaza in 2017 to
consolidate its operations into the National City Tower will leave over 150,000
square feet of space vacant at PNC Plaza. While PNC’s consolidation will raise
CBD vacancy, downtown momentum continues with retail, office, residential, and
hospitality projects currently under construction totaling $1.2 billion in
investment. Upcoming vacancy within the market should provide attractive
opportunities for employers looking to bolster their downtown presence.
Developers continue to fill the pipeline with speculative space
The first half of the year saw multiple speculative projects reach completion
across the market with newly delivered space coming online in three different
submarkets. With positive leasing activity in those recently delivered buildings,
as well as high tenant demand for Class A office space, developers remain
bullish on the market. This sentiment was echoed during the third quarter as two
speculative projects were announced totaling over 260,000 square feet. Since it
appears new product will begin to fill the pipeline, the question for Louisville
remains the same. Will the newly developed space be absorbed by new-to-
market tenants or relocations within the market?
East End Bridge drives growth in surrounding submarkets
The long-awaited East End Bridge will be delivered in the fourth quarter, opening
up Southern Indiana and the Northeastern portion of Louisville for rapid growth
and development. While Southern Indiana has seen the vast majority of
development skewed towards industrial product, the bridge has spurred
unprecedented office development in the Middletown/Eastpoint submarket. The
Old Henry Road corridor has seen the most activity, with over 300,000 square
feet of space delivered or under construction in 2016. With a shortage of
developable sites inside the Gene Snyder, it is projected that office development
will continue to take place in the far Northeast. The increased traffic in these
submarkets from the new bridge should spur further commercial development.
Leasing activity slows, outlook remains positive
2,257
Office Insight
Louisville | Q3 2016
21,492,373
Total inventory (s.f.)
25,885
Q3 2016 net absorption (s.f.)
$17.42
Direct average asking rent
0
Total under construction (s.f.)
12.3%
Total vacancy
187,893
YTD net absorption (s.f.)
-0.5%
12-month rent growth
0.0%
Total preleased
0
100,000
200,000
300,000
400,000
2013 2014 2015 YTD 2016
10%
12%
14%
16%
2011 2012 2013 2014 2015 2016 2017 2018
Without PNC Vacancy With PNC Vacancy

2. Current conditions – submarket Historical leasing activity (s.f.)
Source: JLL Research Source: JLL Research
Total net absorption (s.f.)
Source: JLL Research
Total vacancy rate (%)
Source: JLL Research
Direct average asking rent ($ p.s.f.)
Source: JLL Research
517,690
-148,020
-77,885
86,194
462,281
313,754
426,281
204,612
304,088
187,893
-200,000
0
200,000
400,000
600,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD 2016
$16.59 $16.60
$16.93
$17.24
$16.97
$16.31
$17.11
$17.23
$17.50 $17.42
$15.50
$16.00
$16.50
$17.00
$17.50
$18.00
2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD 2016
11.0%
12.5%
14.2%
15.9%
15.3% 14.8%
13.6% 13.1% 12.8% 12.3%
5.0%
7.0%
9.0%
11.0%
13.0%
15.0%
17.0%
2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD 2016
959,766
1,067,415
938,552
738,564
850,124
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
2012 2013 2014 2015 YTD 2016
©2016 Jones Lang LaSalle IP, Inc. All rights reserved.For more information, contact: Ross Bratcher | ross.bratcher@am.jll.com
Landlordleverage
Tenantleverage
Peaking
market
Falling
market
Bottoming
market
Rising
market
Plainview/Middletown
CBD
South Central
Hurstbourne/Lyndon
St. Matthews
Westport Road/Brownsboro Rd

3. 2,257
Office Statistics
Louisville | Q3 2016
Class Inventory (s.f.)
Total net
absorption
(s.f.)
YTD total net
absorption
(s.f.)
YTD total net
absorption (%
ofstock)
Directvacancy
(%)
Total vacancy
(%)
Average direct
asking rent($
p.s.f.)
YTD
completions
(s.f.)
Under
construction
(s.f.)
CBD Totals 10,293,175 67,357 -1,090 0.0% 11.3% 11.6% $16.46 0 0
Urban Totals 10,293,175 67,357 -1,090 0.0% 11.3% 11.6% $16.46 0 0
Hurstbourne/Lyndon Totals 4,808,195 -13,471 55,875 1.2% 13.1% 13.3% $21.69 245,000 0
Plainview/Middletown Totals 2,888,204 -3,945 77,715 2.7% 13.4% 13.4% $15.74 38,400 0
South Central Totals 1,493,851 -56,357 -26,864 -1.8% 12.5% 16.7% $13.24 0 0
St. Matthews Totals 1,079,692 5,021 33,897 3.1% 8.7% 8.7% $17.61 45,000 0
WestportRoad/Brownsboro Rd Totals 929,256 27,280 48,360 5.2% 8.8% 9.1% $21.62 0 0
Suburbs Totals 11,199,198 -41,472 188,983 1.7% 12.3% 13.0% $18.19 328,400 0
Louisville Totals 21,492,373 25,885 187,893 0.9% 11.8% 12.3% $17.42 328,400 0
CBD A 4,295,069 13,858 13,233 0.3% 11.2% 11.8% $19.34 0 0
Urban A 4,295,069 13,858 13,233 0.3% 11.2% 11.8% $19.34 0 0
Hurstbourne/Lyndon A 3,835,708 -11,432 61,420 1.6% 13.6% 13.8% $22.48 245,000 0
Plainview/Middletown A 1,027,506 0 54,763 5.3% 6.2% 6.2% $18.47 38,400 0
St. Matthews A 459,453 -4,601 33,723 7.3% 7.8% 7.8% $21.25 45,000 0
WestportRoad/Brownsboro Rd A 783,477 27,280 52,571 6.7% 9.2% 9.6% $22.40 0 0
Suburbs A 6,106,144 11,247 202,477 3.3% 11.3% 11.5% $22.04 328,400 0
Louisville A 10,401,213 25,105 215,710 2.1% 11.3% 11.6% $20.93 328,400 0
CBD B 5,998,106 53,499 -14,323 -0.2% 11.3% 11.4% $14.50 0 0
Urban B 5,998,106 53,499 -14,323 -0.2% 11.3% 11.4% $14.50 0 0
Hurstbourne/Lyndon B 972,487 -2,039 -5,545 -0.6% 11.4% 11.4% $16.68 0 0
Plainview/Middletown B 1,860,698 -3,945 22,952 1.2% 17.4% 17.4% $15.35 0 0
South Central B 1,493,851 -56,357 -26,864 -1.8% 12.5% 16.7% $13.24 0 0
St. Matthews B 620,239 9,622 174 0.0% 9.3% 9.3% $15.36 0 0
WestportRoad/Brownsboro Rd B 145,779 0 -4,211 -2.9% 6.8% 6.8% $16.00 0 0
Suburbs B 5,093,054 -52,719 -13,494 -0.3% 13.5% 14.7% $14.93 0 0
Louisville B 11,091,160 780 -27,817 -0.3% 12.3% 12.9% $14.73 0 0
©2016 Jones Lang LaSalle IP, Inc. All rights reserved.For more information, contact: Ross Bratcher | ross.bratcher@am.jll.com