The Louisville industrial market started 2017 strongly with over 605,000 square feet of positive absorption in Q1 driven by a large lease signed at Airport Commerce Center II. While vacancy rates are projected to remain high in the short term as new developments deliver, rental rates are expected to stabilize and investment activity is forecast to increase in 2018. The local economy continues to be driven by trade, transportation, and utilities sectors benefiting the industrial market.

1. JLL Research
Louisville | Q1 2017
Industrial
Outlook
JLL Research
An in-depth look at the
Louisville industrial market.
Analysis includes leasing,
sales, construction and
employment.

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 2017
Insight
Louisville Industrial Outlook
After finishing 2016 with ten straight years of positive absorption, the
Louisville market delivered once again in the first quarter with 605,767
square feet of absorption. Driven by Arvato’s lease signed at Molto’s
645,000-square-foot Airport Commerce Center II and multiple deals signed
in the Riverport submarket leasing activity started 2017 on a high note.
While there are quality large blocks of space available in the market, only
three exceed 500,000 square feet of space with one currently under
construction. With multiple large tenants in the market, developers will look
to begin construction on larger projects as current blocks of available space
are absorbed in the next two quarters.
The first quarter saw multiple project announcements within the Airport and
East submarkets as developers look to infill sites to attract tenants in the
market. As land costs and competition have increased in the Bullitt County
and Southern Indiana submarkets, one-off infill sites will continue to attract
developers looking to enter or expand in the market. Landlords continue to
push leasing rates with average rates remaining at 5-year highs.
Outlook
As the product in the development pipeline delivers in the first half of 2017,
vacancy rates are projected to remain inflated and rental rates will level off,
at least in the short-term. Investment activity is forecasted to ramp up into
2018 as projects in the pipeline are leased up, and investors look for
footholds in the market to add to their portfolios. Located within a day’s
drive to two-thirds of the U.S. population and several important distribution
hubs, Louisville’s location was made even more desirable with Amazon’s
pledge to invest $1.5 billion in a 3.0-million-square-foot air services hub at
CVG Airport in Northern Kentucky. This announcement in addition to the
UPS Worldport facility and multiple ground hubs in Louisville will continue
to drive demand from e-commerce and 3PL users.
Fundamentals Forecast
YTD net absorption 605,767 s.f. ▲
QTD net absorption 605,767 s.f. ▲
Under construction 1,804,553 s.f. ▲
Total vacancy 10.2% ▼
Average asking rent (NNN) $3.70 p.s.f. ▲
Tenant improvements Falling ▼
0
5,000,000
10,000,000
2013 2014 2015 2016 YTD
2017
Supply and demand (s.f.) Net absorption
Deliveries
Industrial market quick out of the gate to start to 2017
7.2% 6.6% 5.7%
8.7%
10.2%
2013 2014 2015 2016 YTD 2017
Total vacancy
$3.30
$3.40
$3.50
$3.60
$3.70
$3.80
2013 2014 2015 2016 YTD 2017
Average asking rents ($/s.f.)
• The modern bulk market built upon momentum from a successful
2016 with 605,767 square feet of positive absorption in Q1.
• Developer confidence remains high as they continue to acquire land
for speculative development in every submarket.
• Clarion Partners purchased the 645,840-square-foot Air Commerce II
from Molto Properties for $42.3 million to end the quarter.

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 stock)
Total
Vacancy (%)
Average
total asking
rent
($ p.s.f.)
YTD
completions
(s.f.)
Under
construction
(s.f.)
Airport 20,169,841 645,840 3.2% 3.3% *$3.90 645,840 452,745
Bullitt County 12,261,199 0 0.0% 10.1% $3.83 0 981,010
East 5,028,451 0 0.0% 0.0% $5.50 0 0
Riverport 11,957,666 -40,073 -0.3% 9.6% $3.14 0 370,798
Southern Indiana 9,460,055 0 0.0% 30.9% $3.86 1,257,600 0
Louisville Totals 58,877,212 605,767 1.0% 10.2% $3.70 1,903,440 1,804,553
Analyzes all industrial buidings greater than 100,000 s.f. with a minimum clear height of 24'
2,117,585
1,014,608
1,750,850
2,234,648
1,934,181 2,059,001
2,742,889
3,029,702
3,843,783
605,767
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Q1 2017
Statistics
Louisville Industrial Outlook
15.1% 15.6%
12.2%
9.2%
8.3%
7.2%
6.6%
5.7% 8.7%
10.2%
2.0%
5.0%
8.0%
11.0%
14.0%
17.0%
2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD 2017
Total vacancy rate (%)
Total net absorption (s.f.)

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.
This report analyzes industrial sales in the last 12 months > 100,000 s.f.
$212,852,385
10
*$68
6.15-7%
100.0%
0.0%
6-6.5% 0 - -
7.5% 0.0% 10 $212,852,385
Top 10 sales transactions the past 12 months
Size (s.f.) $ p.s.f. Sale date
645,840 $65 Mar-17
303,369 $138 Apr-16
611,000 $53 Jun-16
470,000 $55 Jun-16
151,750 $117 Feb-17
270,000 $55 Jun-16
221,000 $55 Jun-16
137,500 $82 Jun-16
212,500 $46 Apr-16
Setzer Properties
ARES
Radial Inc. (Formerly eBay)
The LandMark Group
$41,893,105
$32,200,000
$25,605,600
$17,700,000
2311 South Park Rd Monmouth Real Estate Gray Construction $11,304,000
9001 Cane Run Rd Industrial Property Trust Brennan Investment Group $9,700,000
Radial Inc. (Formerly eBay) $14,709,600
7700 Trade Port Dr Industrial Property Trust Radial Inc. (Formerly eBay) $12,040,080
9101 Cane Run Rd Industrial Property Trust
7601 Trade Port Dr Industrial Property Trust
65 Kingbrook Pkwy Berger Foundation
12900 Plantside Dr
Columbia Property
Investors
649 Omega Parkway Industrial Property Trust
2500 Export Drive Clarion Partners Molto Properties $42,300,000
Building address Buyer company Seller company Sales price $
Sales volume $ by submarket
Warehouse/Dist. sales
volume as % of total YTD
Flex/R&D sales volume as %
of total YTD
Cap rate range
Core Class A Ind.
Core Class A Flex
Average Class A price p.s.f.
YTD* (skewed by Fedex and
Faurecia sales)
At a glance
Total volume YTD
Number of transactions YTD
Average Class A cap rate
YTD
Sales activity by building type
Transactions details
Number of partial interest
transactions
Top sellers (s.f.)Top buyers (s.f.)
Number of domestic
buyers
Foreign capital $
Average partial interest
acquired
Number of foreign
buyers
Domestic Capital $
3,149,124 s.f.
$212,852,385
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
$250,000,000
Warehouse / Distribution
Sum of Price ($) Sum of RBA (SF)
57%
20%
10%
5%
4% 4%
Industrial Property Trust Clarion Partners
Columbia Property Investors Berger Foundation
Monmouth Real Estate Another Room Self Storage
31%
21%19%
10%
7%
5%
4% 4%
Radial Inc. (Formerly eBay) Molto Properties
ARES Setzer Properties
Brennan Investment Group The LandMark Group
Gray Construction DCT Industrial
$67,455,280
$59,593,105
$53,604,000
$32,200,000
Riverport
East
Airport
Bullitt County
Q1 2017
Sales
Louisville Industrial Outlook
57%
20%
10%
5%
4% 4%
Industrial Property Trust Clarion Partners
Columbia Property Investors Berger Foundation
Monmouth Real Estate Another Room Self Storage
31%
21%19%
10%
7%
5%
4% 4%
Radial Inc. (Formerly eBay) Molto Properties
ARES Setzer Properties
Brennan Investment Group The LandMark Group
Gray Construction DCT Industrial

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.
This report analyzes all industrial developments under construction & new deliveries > 100,000 s.f.
Total leased at delivery (%) 54.0%
Total speculative at delivery (s.f.) 3,835,572
Total BTS at delivery (s.f.) 2,076,969
Total Owner-User at delivery (s.f.) 362,500
Total # of properties delivered 18
Asking rental rate (low - high) $3.69 - $4.25
Top 5 projects delivered past 12 months
Building RBA (s.f.) Delivery date
Leased at
delivery (%)
Crossdock River Ridge 664,800 Q1 2017 0%
Aiport Commerce Center II 645,840 Q1 2017 100%
Van Trust River Ridge 592,800 Q1 2017 0%
LogistiCenter at 480 546,000 Q4 2016 0%
Pinchal River Ridge 458,640 Q3 2016 0%
Total pre-leased (%) 0.0%
Total speculative under construction (s.f.) 1,804,553
Total BTS under construction (s.f.) -
Total Owner-user under construction (s.f.) -
Total # of properties UC 4
Asking rental rate (low - high) $3.75 - $4.25
Top projects currently under construction
Building RBA (s.f.) Delivery date
Pre-leased
(%)
Velocity 65 Bldg 1 721,050 Q3 2017 0%
New Cut Center Bldg 1 452,745 Q2 2017 0%
Riverport Distribution Center 370,798 Q2 2017 0%
Park 65 Business Center 259,960 Q4 2017 0%
Speculative
Speculative
Speculative
Submarket
Under construction
1,804,553
Under construction (s.f.)
Under construction in-depth
Upcoming deliveries by year (s.f., excludes YTD completions)
New deliveries
Completions in-depth
6,275,041
Total delivered past 12 months (s.f.)
Historical deliveries (s.f.)
Construction typeOwnerSubmarket
Southern Indiana
Bullitt County
Southern Indiana
Airport
Southern Indiana
Pinchal & Co.
Dermody Properties
Van Trust
Molto
Crossdock Dev.
Speculative
Speculative
Bullitt County
Riverport
Airport
Bullitt County
Speculative
Owner Construction type
Speculative
Johnson Development
IAC
Main Street Realty
Browning
Speculative
Speculative
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
2010 2011 2012 2013 2014 2015 2016 YTD 2017
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
2017
Speculative
Q1 2017
Construction
Louisville Industrial Outlook

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 2017
Construction
Louisville Industrial Outlook
New Cut Center Bldg 1
Signed tenant(s): none
Square Feet: 452,745
Landlord: Main Street Realty
Est. completion: Q2 2017
Gateway 600
Signed tenant(s): none
Square Feet: 592,800
Landlord: VanTrust
Completed: Q1 2017
Air Commerce Center II
Signed tenant(s): Arvato
Square Feet: 645,840
Landlord: Molto Properties
Completed: Q1 2017
Velocity 65 Bldg 1
Signed tenant(s): none
Square Feet: 721,000
Landlord: Browning Investments
Est. completion: Q3 2017
Crossdock River Ridge
Signed tenant(s): none
Square Feet: 664,800
Landlord: Crossdock Development
Lewis and Clark Bridge
Completed: Q4 2016
Completed: Q1 2017

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.
23%
13%
13%13%
12%
10%
7%
Trade, Transportation & Utilities
Educational & Health Services
Professional & Business Services
Manufacturing
Government
Leisure & Hospitality
Financial Activities
Mining, Logging & Construction
Other Services
Information
Q1 2017
Employment
Louisville Industrial Outlook
4.7%U.S. unemployment
1.5%U.S. 12-month job growth
4.7%Louisville unemployment
2.8%Louisville 12-month job growth
5.0%Kentucky unemployment
1.6%Kentucky 12-month job growth
0.0%
0.7%
1.4%
2.1%
2.8%
3.5%
2013 2014 2015 2016 2017
Louisville U.S.
-300
100
100
100
700
1,100
1,600
4,400
4,700
5,300
-2,000 -1,000 0 1,000 2,000 3,000 4,000 5,000 6,000
Government
Information
Leisure & Hospitality
Other Services
Financial Activities
Educational & Health Services
Mining, Logging & Construction
Trade, Transportation & Utilities
Manufacturing
Professional & Business Services
-2.0
3.0
8.0
13.0
18.0
2013 2014 2015 2016 2017
Professional & Business Services Information
Government Financial Activities
0%
4%
8%
12%
400,000
500,000
600,000
700,000
800,000
2013 2014 2015 2016 2017
Employment Unemployment
Employment vs. unemployment rate
Employment by industry Office employment trends (12-month change, 000s)
Job growth by sector (12-month change)
Job growth (12-month change)
Job growth by sector (12-month change)

8. © 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.
Andrew Batson
Vice President, Director of Research
+1 216 937 4374
andrew.batson@am.jll.com
Ross Bratcher
Research Analyst
+1 513 719 3706
ross.bratcher@am.jll.com
About JLL
JLL (NYSE: JLL) is a leading professional services firm that
specializes in real estate and investment management. A
Fortune 500 company, JLL helps real estate owners,
occupiers and investors achieve their business ambitions.
In 2016, JLL had revenue of $6.8 billion and fee revenue of
$5.8 billion and, on behalf of clients, managed 4.4 billion
square feet, or 409 million square meters, and completed
sales acquisitions and finance transactions of
approximately $136 billion. At year-end 2016, JLL had
nearly 300 corporate offices, operations in over 80
countries and a global workforce of more than 77,000. As
of December 31, 2016, LaSalle Investment Management
has $60.1 billion of real estate under asset management.
JLL is the brand name, and a registered trademark, of
Jones Lang LaSalle Incorporated. For further information,
visit www.jll.com.
About JLL Research
JLL’s research team delivers intelligence, analysis and
insight through market-leading reports and services that
illuminate today’s commercial real estate dynamics and
identify tomorrow’s challenges and opportunities. Our
more than 400 global research professionals track and
analyze economic and property trends and forecast
future conditions in over 60 countries, producing
unrivalled local and global perspectives. Our research and
expertise,
fueled by real-time information and innovative thinking
around the world, creates a competitive advantage for
our clients and drives successful strategies and optimal
real estate decisions.