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Industrial
Outlook
An in-depth look at the
Louisville industrial market.
Analysis includes leasing,
sales, construction and
employment.
Louisville | Q1 2020
JLL Research
© 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 2020
Louisville
Industrial Insight
The Louisville industrial market started 2020 with slower leasing velocity
relative to the previous two years. With approximately four-million square feet
of space scheduled for delivery this year, JLL will be closely monitoring the
impact on the vacancy rate. The current construction pipeline appears to
provide many opportunities for users looking for 100,000 square feet to
upwards of one-million square feet.
Despite the previously strong industrial market, the economic uncertainty
created by COVID-19 may lead some occupiers to closely evaluate their
requirements. Ford’s recent decision to close both of its Louisville operations
will impact users supplying those plants.
In the next two-quarters, short-term space may be in particularly strong
demand as occupiers adjust to accommodate a growing base of online
consumers. The overall vacancy rate may rise as tenants evaluate their space
needs in a time of considerable new construction. Related to this, JLL will be
closely evaluating the sublease market and the demand levels for second
generation space.
Outlook
The COVID-19 outbreak has the potential to impact every segment of the
commercial real estate industry. However, it appears that the industrial sector
is among the best positioned to weather the challenges of this current
environment. Furthermore, Louisville has many inherent strengths. The
proximity to the UPS WorldPort, two Ford plants, GE Appliance Park, as well as
highway access and population access make Louisville a strong location
despite economic cycles. As mentioned, JLL will be closely tracking the
market fundamentals in this time of uncertainty.
For more information, contact: Alex Westcott | alex.westcott@am.jll.com
• Arvato leased the recently completed Dermody building in Renaissance
Business Park South.
• Multiple options are currently available, or under construction, for users
of all size ranges.
• Short-term space requirements are expected to increase as companies
look to shore up supply chain gaps.
Fundamentals Forecast
YTD net absorption 161,967 s.f. ▶
Under construction 4,971,905 s.f. ▲
Total vacancy 7.7% ▶
Sublease vacancy 475,000 s.f. ▲
Average asking rent $3.94 p.s.f. ▲
Concessions Stable ▶
Market slows, vacancy rises amid COVID-19 uncertainty
0
2,000,000
4,000,000
6,000,000
2016 2017 2018 2019 YTD 2020
Supply and demand (s.f.) Net absorption
Deliveries
2%
4%
6%
8%
10%
12%
14%
16%
2008 2010 2012 2014 2016 2018 2020
Total vacancy
$2
$3
$4
$5
2006 2008 2010 2012 2014 2016 2018 2020
Average asking rent ($ p.s.f.) Direct
Sublease
Given the health, policy, economic and financial disruption unfolding from the
COVID-19 outbreak, resulting real estate market shifts will not be fully reflected in Q1
2020 statistical indicators. It is too early to provide a quantitative assessment or
forecast of the ultimate market impact of COVID-19. Our analysis focuses on Q1
market activity and how the market is positioned moving forward. We will be
continually monitoring market movements as the situation evolves. Please feel free
to contact us if we can assist.
© 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 25,391,591 352,800 1.4% 5.2% $4.00 604,880 1,535,857
Bullitt County 13,647,026 -267,033 -2.0% 16.0% $3.98 0 2,205,258
East 6,135,648 0 0.0% 0.9% $5.95 0 0
Riverport 12,557,133 76,200 0.6% 4.7% $3.72 0 314,500
Southern Indiana 11,935,172 0 0.0% 9.9% $3.80 150,000 916,290
Louisville Totals 69,666,570 161,967 0.2% 7.7% $3.94 754,880 4,971,905
Analyzes all industrial buidings greater than 100,000 s.f. with a minimum clear height of 24'
1,934,181 2,059,001
2,742,889
3,029,702
3,843,783
2,568,298
5,710,124
5,241,178
161,967
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
2012 2013 2014 2015 2016 2017 2018 2019 Q1 2020
Q1 2020
Statistics
Louisville Industrial Outlook
8.3%
7.2%
6.6%
5.7%
8.7%
11.7%
9.4%
6.9%
7.7%
2.0%
5.0%
8.0%
11.0%
14.0%
2012 2013 2014 2015 2016 2017 2018 2019 Q1 2020
© 2020 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
© 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.
$225,911,342
12
$71
5.00% - 5.75%
100.0%
0.0%
Top sales transactions last 12 months
Size (s.f.) $ p.s.f. Sale date
Pinchal 250,000 $13,125,000 $53 Sep-19
Exeter Medline 400,000 $20,800,000 $52 Sep-19
JW Mitchell Columbia Property 303,369 $47,900,000 $158 Sep-19
Exeter 134,888 $6,289,873 $51 Aug-19
301 Logistics Avenue Tratt Opus 426,450 $25,600,000 $60 Jun-19
Stoltz Real Estate Jefferson United 210,000 $17,850,000 $85 May-19
9101 Minor Lane IAC 324,991 $77 May-19
100 Brooks Way MDH 259,960 $16,500,000 $64 May-19
857 Park Loop Road* Colony Capital Dermody 546,000 $26,489,801 $47 Feb-19
101 Lewman Way Gray
12900 Plantside Drive
1065 Conestoga Parkway
Top sellers (s.f.)Top buyers (s.f.)
Average Class A sale price p.s.f.
Last 12 months transaction volume at a glance
Total volume
Number of transactions
Average Class A cap rate range
Sales activity by building type last 12 months
Warehouse/Dist. sales volume as % of
total
Manufacturing sales volume as % of
total
Building address Buyer company
Transactions details
Seller company
12 month sales volume $ by submarket
Sales price $
$24,500,000
4500 Progress Boulevard Trident Capital Group
5101 Jeff Commerce Drive
Kelly Development
Johnson Development
*Purchased as part of portfolio
3,439,428 s.f.
$225,911,342
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.
4,000,000 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)
19%
16%
12%
9%
9%
9%
8%
7%
6%
Exeter Colony Capital
Tratt Properties IAC
JW Mitchell Dream Industrial REIT
MDH Pinchal
Stoltz Real Estate Sperber Familly Trust
16%
12%
12%
9%9%
9%
8%
7%
6%
Dermody Opus
Medline Kelly Development
Columbia Property Investors Transwestern
Johnson Development Gray
Jefferson United Atalaya Investments
TCG Progress FCI
$77,281,469
$55,200,000
$54,679,873
$38,750,000
Bullitt County
East
Airport
Southern Indiana
Q1 2020
Sales
Louisville Industrial Outlook
This report analyzes all industrial sales > 75,000 s.f. year-to-date
© 2020 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.
$225,911,342
12
$71
5.00% - 5.75%
100.0%
0.0%
Top sales transactions last 12 months
Size (s.f.) $ p.s.f. Sale date
Pinchal 250,000 $13,125,000 $53 Sep-19
Exeter Medline 400,000 $20,800,000 $52 Sep-19
JW Mitchell Columbia Property 303,369 $47,900,000 $158 Sep-19
Exeter 134,888 $6,289,873 $51 Aug-19
301 Logistics Avenue Tratt Opus 426,450 $25,600,000 $60 Jun-19
Stoltz Real Estate Jefferson United 210,000 $17,850,000 $85 May-19
9101 Minor Lane IAC 324,991 $77 May-19
100 Brooks Way MDH 259,960 $16,500,000 $64 May-19
857 Park Loop Road* Colony Capital Dermody 546,000 $26,489,801 $47 Feb-19
101 Lewman Way Gray
12900 Plantside Drive
1065 Conestoga Parkway
Top sellers (s.f.)Top buyers (s.f.)
Average Class A sale price p.s.f.
Last 12 months transaction volume at a glance
Total volume
Number of transactions
Average Class A cap rate range
Sales activity by building type last 12 months
Warehouse/Dist. sales volume as % of
total
Manufacturing sales volume as % of
total
Building address Buyer company
Transactions details
Seller company
12 month sales volume $ by submarket
Sales price $
$24,500,000
4500 Progress Boulevard Trident Capital Group
5101 Jeff Commerce Drive
Kelly Development
Johnson Development
*Purchased as part of portfolio
3,439,428 s.f.
$225,911,342
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.
4,000,000 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)
19%
16%
12%
9%
9%
9%
8%
7%
6%
Exeter Colony Capital
Tratt Properties IAC
JW Mitchell Dream Industrial REIT
MDH Pinchal
Stoltz Real Estate Sperber Familly Trust
16%
12%
12%
9%9%
9%
8%
7%
6%
Dermody Opus
Medline Kelly Development
Columbia Property Investors Transwestern
Johnson Development Gray
Jefferson United Atalaya Investments
TCG Progress FCI
$77,281,469
$55,200,000
$54,679,873
$38,750,000
Bullitt County
East
Airport
Southern Indiana
$225,911,342
12
$71
5.00% - 5.75%
100.0%
0.0%
Top sales transactions YTD
Size (s.f.) $ p.s.f. Sale date
Pinchal 250,000 $13,125,000 $53 Sep-19
Exeter Medline 400,000 $20,800,000 $52 Sep-19
JW Mitchell Columbia Property 303,369 $47,900,000 $158 Sep-19
Exeter 134,888 $6,289,873 $51 Aug-19
301 Logistics Avenue Tratt Opus 426,450 $25,600,000 $60 Jun-19
Stoltz Real Estate Jefferson United 210,000 $17,850,000 $85 May-19
9101 Minor Lane IAC 324,991 $77 May-19
100 Brooks Way MDH 259,960 $16,500,000 $64 May-19
857 Park Loop Road* Colony Capital Dermody 546,000 $26,489,801 $47 Feb-19
101 Lewman Way Gray
12900 Plantside Drive
1065 Conestoga Parkway
Top sellers (s.f.)Top buyers (s.f.)
Average Class A sale price p.s.f.
YTD transaction volume at a glance
Total volume
Number of transactions
Average Class A cap rate range
YTD sales activity
Warehouse/Dist. sales volume as % of
total
Manufacturing sales volume as % of
total
Building address Buyer company
Transactions details
Seller company
YTD sales volume by submarket
Sales price $
$24,500,000
4500 Progress Boulevard Trident Capital Group
5101 Jeff Commerce Drive
Kelly Development
Johnson Development
*Purchased as part of portfolio
3,439,428 s.f.
$225,911,342
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.
4,000,000 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)
19%
16%
12%
9%
9%
9%
8%
7%
6%
Exeter Colony Capital
Tratt Properties IAC
JW Mitchell Dream Industrial REIT
MDH Pinchal
Stoltz Real Estate Sperber Familly Trust
16%
12%
12%
9%9%
9%
8%
7%
6%
Dermody Opus
Medline Kelly Development
Columbia Property Investors Transwestern
Johnson Development Gray
Jefferson United Atalaya Investments
TCG Progress FCI
$77,281,469
$55,200,000
$54,679,873
$38,750,000
Bullitt County
East
Airport
Southern Indiana
$220,411,342
11
$71
5.00% - 5.75%
100.0%
0.0%
Top sales transactions YTD
Size (s.f.) $ p.s.f. Sale date
Pinchal 250,000 $13,125,000 $52.50 Sep-19
Exeter Medline 400,000 $20,800,000 $52.00 Sep-19
JW Mitchell Columbia Property 303,369 $47,900,000 $157.89 Sep-19
Exeter 134,888 $6,289,873 $51.00 Aug-19
301 Logistics Avenue Tratt Opus 426,450 $25,600,000 $60.00 Jun-19
Stoltz Real Estate Jefferson United 210,000 $17,850,000 $85.00 May-19
9101 Minor Lane IAC 324,991 $77.00 May-19
100 Brooks Way MDH 259,960 $16,500,000 $64.00 May-19
857 Park Loop Road* Colony Capital Dermody 546,000 $26,489,801 $47.00 Feb-19
5101 Jeff Commerce Drive
Kelly Development
Johnson Development
*Purchased as part of portfolio
Building address Buyer company
Transactions details
Seller company
YTD sales volume by submarket
Sales price $
$24,500,000
4500 Progress Boulevard Trident Capital Group
101 Lewman Way Gray
Average Class A sale price p.s.f.
YTD transaction volume at a glance
Total volume
Number of transactions
Average Class A cap rate range
YTD sales activity
Warehouse/Dist. sales volume as % of
total
Manufacturing sales volume as % of
total
12900 Plantside Drive
1065 Conestoga Parkway
Top sellers (s.f.)Top buyers (s.f.)
$225,911,342
3,439,428 s.f.
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.
4,000,000 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)
19%
16%
12%
9%
9%
9%
8%
7%
6%
Exeter Colony Capital
Tratt Properties IAC
JW Mitchell Dream Industrial REIT
MDH Pinchal
Stoltz Real Estate Sperber Familly Trust
16%
12%
12%
9%9%
9%
8%
7%
6%
Dermody Opus
Medline Kelly Development
Columbia Property Investors Transwestern
Johnson Development Gray
Jefferson United Atalaya Investments
TCG Progress FCI
$77,281,469
$55,200,000
$54,679,873
$38,750,000
Bullitt County
East
Airport
Southern Indiana
$180,429,873
9
$76
5.00% - 5.75%
100.0%
0.0%
Top sales transactions last 12 months
Size (s.f.) $ p.s.f. Sale date
Pinchal 250,000 $52.50 Sep-19
Exeter Medline 400,000 $52.00 Sep-19
JW Mitchell Columbia Property 303,369 $158.00 Sep-19
Exeter 134,888 $51.00 Aug-19
301 Logistics Avenue Tratt Opus 426,450 $60.00 Jun-19
Stoltz Real Estate Jefferson United 210,000 $85.00 May-19
9101 Minor Lane IAC 324,991 $77.00 May-19
100 Brooks Way MDH 259,960 $64.00 May-19
$6,289,873
$25,600,000
$17,850,000
$16,500,000
5101 Jeff Commerce Drive
Kelly Development
Johnson Development
Building address Buyer company
Transactions details
Seller company
12 month sales volume $ by submarket
Sales price $
$24,500,000
4500 Progress Boulevard Trident Capital Group
101 Lewman Way Gray
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 range
Sales activity by building type last 12 months
Warehouse/Dist. sales volume as % of
total
Manufacturing sales volume as % of
total
12900 Plantside Drive
1065 Conestoga Parkway
Top sellers (s.f.)Top buyers (s.f.)
$13,125,000
$20,800,000
$47,900,000
$180,429,873
2,433,408 s.f.
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.
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
Warehouse / Distribution
Sum of Price ($) Sum of RBA (SF)
27%
18%
13%
12%
11%
10%
9%
Exeter Tratt Properties
IAC JW Mitchell
MDH Pinchal
Stoltz Real Estate
18%
16%
13%
12%
11%
10%
9%
Opus Medline
Kelly Development Columbia Property Investors
Johnson Development Gray
Jefferson United TCG Progress
FCI
$55,200,000
$49,179,873
$38,750,000
$37,300,000
East
Airport
Southern Indiana
Bullitt County
© 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 (%) 27.5%
Total speculative at delivery (s.f.) 1,386,848
Total BTS at delivery (s.f.) -
Total owner-user at delivery (s.f.) 1,887,000
Total # of properties delivered 9
Asking rental rate (low - high) $4.10 - $4.95
Largest projects last 12 months
Building/Address RBA (s.f.) Delivery date
Leased at
delivery (%)
Medline Distribution Center 1,100,000 Q2 2019 100%
Niagara River Ridge 469,000 Q3 2019 100%
Dermody Renaissance South 352,800 Q1 2020 0%
New Cut Center Bldg 2 331,928 Q4 2019 0%
4301 Produce Road 318,000 Q2 2019 100%
Exeter New Cut 252,080 Q1 2020 0%
Total pre-leased (%) 3.4%
Total speculative under construction (s.f.) 4,971,905
Total BTS under construction (s.f.) -
Total Owner-user under construction (s.f.) -
Total # of properties UC 10
Asking rental rate (low - high) $3.95 - $5.25
Largest projects currently under construction
Building RBA (s.f.) Delivery date Pre-leased (%)
Bourbon Logistics Center 1,040,158 Q2 2020 0%
Logistics Airpark 931,907 Q4 2020 0%
Velocity 65 Trade Center Bldg. 2 908,600 Q4 2020 0%
Silver Creek Logistics, Bldg. A 659,790 Q2 2020 0%
Greenbelt Logistics Center 314,500 Q3 2020 0%
Last Mile Logistics Center 283,820 Q2 2020 0%
Speculative
Speculative
Speculative
Speculative
Airport
Riverport
Bullitt County Speculative
Core5
Eagle Pointe
Browning
Southern Indiana Clarion
Owner-user
Submarket
Under construction
4,971,905
Under construction (s.f.)
Under construction in-depth
Upcoming deliveries by year (s.f., excludes YTD completions)
Airport Exeter Property Group Speculative
Owner Construction type
New and historical deliveries
Completions in-depth
3,273,848
Total delivered past 12 months (s.f.)
Construction typeOwnerSubmarket
Airport
Airport
Airport
Southern Indiana
Southern Indiana
Premier Packaging
Main Street Realty
Dermody
Niagara Bottling
Medline
Owner-user
Owner-user
Speculative
Bullitt County Core5 Speculative
Airport Nicklies Speculative
1,620,492
2,553,410 2,452,793
5,896,471
4,424,993
4,085,552
2,877,960
754,880
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
2013 2014 2015 2016 2017 2018 2019 2020
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
2020
Speculative
Q1 2020
Construction
Louisville Industrial Outlook
This report analyzes all industrial developments under construction & new deliveries > 100,000 s.f.
© 2020 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.
© 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 2020
Construction
Louisville Industrial Outlook
1
Location: 200 Velocity Way
Square feet: 908,600
Tenant(s): None
Landlord: Browning
1
2
Location: 5530 Minor Lane
Square feet: 931,907
Tenant(s): None
Landlord: Nicklies
2
3
Address: 170 Clermont Drive
Square feet: 1,040,158
Tenant(s): None
Landlord: Core5
3
© 2020 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.
4
4
Address: 6611 Shepherdsville
Road
Square feet: 283,820
Tenant(s): None
Landlord: Core5
© 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 2020
Employment
Louisville Industrial Outlook
3.5%U.S. unemployment
1.5%U.S. 12-month job growth
3.9%Louisville unemployment
0.8%Louisville 12-month job growth
4.2%Kentucky unemployment
0.7%Kentucky 12-month job growth
-5.0
0.0
5.0
10.0
15.0
20.0
2015 2016 2017 2018 2019 2020
Trade, Transportation & Utilities Manufacturing
Other Services Mining Logging & Construction
0%
4%
8%
400,000
500,000
600,000
700,000
800,000
2015 2016 2017 2018 2019 2020
Employment Unemployment
Employment vs. unemployment rate
Employment by industry
Job growth (12-month change)
-1,400
-1,200
-800
-700
-200
-200
1,800
2,000
2,400
3,500
-4,000 -2,000 0 2,000 4,000 6,000
Trade, Transportation &…
Mining, Logging & Construction
Government
Manufacturing
Information
Other Services
Financial Activities
Leisure & Hospitality
Educational & Health Services
Professional & Business…
Job growth*
Historical employment Job growth by sector*
Employment by industry Industrial employment*
* Represents 12-month change in employment. All charts represent economic conditions through January 2020, which was the latest data available at the time of publishing this report.
© 2020 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 2019 2020
Louisville U.S.
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
About JLL
JLL (NYSE: JLL) is a leading professional services firm that
specializes in real estate and investment management. Our vision
is to reimagine the world of real estate, creating rewarding
opportunities and amazing spaces where people can achieve
their ambitions. In doing so, we will build a better tomorrow for
our clients, our people and our communities. JLL is a Fortune 500
company with annual revenue of $16.3 billion, operations in over
80 countries and a global workforce of more than 93,000 as of
September 30, 2019. JLL is the brand name, and a registered
trademark, of Jones Lang LaSalle Incorporated. For further
information, visit 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.
© 2020 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.

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Jll Louisville Industrial Outlook - Q1 2020

  • 1. Industrial Outlook An in-depth look at the Louisville industrial market. Analysis includes leasing, sales, construction and employment. Louisville | Q1 2020 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 2020 Louisville Industrial Insight The Louisville industrial market started 2020 with slower leasing velocity relative to the previous two years. With approximately four-million square feet of space scheduled for delivery this year, JLL will be closely monitoring the impact on the vacancy rate. The current construction pipeline appears to provide many opportunities for users looking for 100,000 square feet to upwards of one-million square feet. Despite the previously strong industrial market, the economic uncertainty created by COVID-19 may lead some occupiers to closely evaluate their requirements. Ford’s recent decision to close both of its Louisville operations will impact users supplying those plants. In the next two-quarters, short-term space may be in particularly strong demand as occupiers adjust to accommodate a growing base of online consumers. The overall vacancy rate may rise as tenants evaluate their space needs in a time of considerable new construction. Related to this, JLL will be closely evaluating the sublease market and the demand levels for second generation space. Outlook The COVID-19 outbreak has the potential to impact every segment of the commercial real estate industry. However, it appears that the industrial sector is among the best positioned to weather the challenges of this current environment. Furthermore, Louisville has many inherent strengths. The proximity to the UPS WorldPort, two Ford plants, GE Appliance Park, as well as highway access and population access make Louisville a strong location despite economic cycles. As mentioned, JLL will be closely tracking the market fundamentals in this time of uncertainty. For more information, contact: Alex Westcott | alex.westcott@am.jll.com • Arvato leased the recently completed Dermody building in Renaissance Business Park South. • Multiple options are currently available, or under construction, for users of all size ranges. • Short-term space requirements are expected to increase as companies look to shore up supply chain gaps. Fundamentals Forecast YTD net absorption 161,967 s.f. ▶ Under construction 4,971,905 s.f. ▲ Total vacancy 7.7% ▶ Sublease vacancy 475,000 s.f. ▲ Average asking rent $3.94 p.s.f. ▲ Concessions Stable ▶ Market slows, vacancy rises amid COVID-19 uncertainty 0 2,000,000 4,000,000 6,000,000 2016 2017 2018 2019 YTD 2020 Supply and demand (s.f.) Net absorption Deliveries 2% 4% 6% 8% 10% 12% 14% 16% 2008 2010 2012 2014 2016 2018 2020 Total vacancy $2 $3 $4 $5 2006 2008 2010 2012 2014 2016 2018 2020 Average asking rent ($ p.s.f.) Direct Sublease Given the health, policy, economic and financial disruption unfolding from the COVID-19 outbreak, resulting real estate market shifts will not be fully reflected in Q1 2020 statistical indicators. It is too early to provide a quantitative assessment or forecast of the ultimate market impact of COVID-19. Our analysis focuses on Q1 market activity and how the market is positioned moving forward. We will be continually monitoring market movements as the situation evolves. Please feel free to contact us if we can assist.
  • 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 25,391,591 352,800 1.4% 5.2% $4.00 604,880 1,535,857 Bullitt County 13,647,026 -267,033 -2.0% 16.0% $3.98 0 2,205,258 East 6,135,648 0 0.0% 0.9% $5.95 0 0 Riverport 12,557,133 76,200 0.6% 4.7% $3.72 0 314,500 Southern Indiana 11,935,172 0 0.0% 9.9% $3.80 150,000 916,290 Louisville Totals 69,666,570 161,967 0.2% 7.7% $3.94 754,880 4,971,905 Analyzes all industrial buidings greater than 100,000 s.f. with a minimum clear height of 24' 1,934,181 2,059,001 2,742,889 3,029,702 3,843,783 2,568,298 5,710,124 5,241,178 161,967 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 2012 2013 2014 2015 2016 2017 2018 2019 Q1 2020 Q1 2020 Statistics Louisville Industrial Outlook 8.3% 7.2% 6.6% 5.7% 8.7% 11.7% 9.4% 6.9% 7.7% 2.0% 5.0% 8.0% 11.0% 14.0% 2012 2013 2014 2015 2016 2017 2018 2019 Q1 2020 © 2020 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
  • 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. $225,911,342 12 $71 5.00% - 5.75% 100.0% 0.0% Top sales transactions last 12 months Size (s.f.) $ p.s.f. Sale date Pinchal 250,000 $13,125,000 $53 Sep-19 Exeter Medline 400,000 $20,800,000 $52 Sep-19 JW Mitchell Columbia Property 303,369 $47,900,000 $158 Sep-19 Exeter 134,888 $6,289,873 $51 Aug-19 301 Logistics Avenue Tratt Opus 426,450 $25,600,000 $60 Jun-19 Stoltz Real Estate Jefferson United 210,000 $17,850,000 $85 May-19 9101 Minor Lane IAC 324,991 $77 May-19 100 Brooks Way MDH 259,960 $16,500,000 $64 May-19 857 Park Loop Road* Colony Capital Dermody 546,000 $26,489,801 $47 Feb-19 101 Lewman Way Gray 12900 Plantside Drive 1065 Conestoga Parkway Top sellers (s.f.)Top buyers (s.f.) Average Class A sale price p.s.f. Last 12 months transaction volume at a glance Total volume Number of transactions Average Class A cap rate range Sales activity by building type last 12 months Warehouse/Dist. sales volume as % of total Manufacturing sales volume as % of total Building address Buyer company Transactions details Seller company 12 month sales volume $ by submarket Sales price $ $24,500,000 4500 Progress Boulevard Trident Capital Group 5101 Jeff Commerce Drive Kelly Development Johnson Development *Purchased as part of portfolio 3,439,428 s.f. $225,911,342 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. 4,000,000 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) 19% 16% 12% 9% 9% 9% 8% 7% 6% Exeter Colony Capital Tratt Properties IAC JW Mitchell Dream Industrial REIT MDH Pinchal Stoltz Real Estate Sperber Familly Trust 16% 12% 12% 9%9% 9% 8% 7% 6% Dermody Opus Medline Kelly Development Columbia Property Investors Transwestern Johnson Development Gray Jefferson United Atalaya Investments TCG Progress FCI $77,281,469 $55,200,000 $54,679,873 $38,750,000 Bullitt County East Airport Southern Indiana Q1 2020 Sales Louisville Industrial Outlook This report analyzes all industrial sales > 75,000 s.f. year-to-date © 2020 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. $225,911,342 12 $71 5.00% - 5.75% 100.0% 0.0% Top sales transactions last 12 months Size (s.f.) $ p.s.f. Sale date Pinchal 250,000 $13,125,000 $53 Sep-19 Exeter Medline 400,000 $20,800,000 $52 Sep-19 JW Mitchell Columbia Property 303,369 $47,900,000 $158 Sep-19 Exeter 134,888 $6,289,873 $51 Aug-19 301 Logistics Avenue Tratt Opus 426,450 $25,600,000 $60 Jun-19 Stoltz Real Estate Jefferson United 210,000 $17,850,000 $85 May-19 9101 Minor Lane IAC 324,991 $77 May-19 100 Brooks Way MDH 259,960 $16,500,000 $64 May-19 857 Park Loop Road* Colony Capital Dermody 546,000 $26,489,801 $47 Feb-19 101 Lewman Way Gray 12900 Plantside Drive 1065 Conestoga Parkway Top sellers (s.f.)Top buyers (s.f.) Average Class A sale price p.s.f. Last 12 months transaction volume at a glance Total volume Number of transactions Average Class A cap rate range Sales activity by building type last 12 months Warehouse/Dist. sales volume as % of total Manufacturing sales volume as % of total Building address Buyer company Transactions details Seller company 12 month sales volume $ by submarket Sales price $ $24,500,000 4500 Progress Boulevard Trident Capital Group 5101 Jeff Commerce Drive Kelly Development Johnson Development *Purchased as part of portfolio 3,439,428 s.f. $225,911,342 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. 4,000,000 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) 19% 16% 12% 9% 9% 9% 8% 7% 6% Exeter Colony Capital Tratt Properties IAC JW Mitchell Dream Industrial REIT MDH Pinchal Stoltz Real Estate Sperber Familly Trust 16% 12% 12% 9%9% 9% 8% 7% 6% Dermody Opus Medline Kelly Development Columbia Property Investors Transwestern Johnson Development Gray Jefferson United Atalaya Investments TCG Progress FCI $77,281,469 $55,200,000 $54,679,873 $38,750,000 Bullitt County East Airport Southern Indiana $225,911,342 12 $71 5.00% - 5.75% 100.0% 0.0% Top sales transactions YTD Size (s.f.) $ p.s.f. Sale date Pinchal 250,000 $13,125,000 $53 Sep-19 Exeter Medline 400,000 $20,800,000 $52 Sep-19 JW Mitchell Columbia Property 303,369 $47,900,000 $158 Sep-19 Exeter 134,888 $6,289,873 $51 Aug-19 301 Logistics Avenue Tratt Opus 426,450 $25,600,000 $60 Jun-19 Stoltz Real Estate Jefferson United 210,000 $17,850,000 $85 May-19 9101 Minor Lane IAC 324,991 $77 May-19 100 Brooks Way MDH 259,960 $16,500,000 $64 May-19 857 Park Loop Road* Colony Capital Dermody 546,000 $26,489,801 $47 Feb-19 101 Lewman Way Gray 12900 Plantside Drive 1065 Conestoga Parkway Top sellers (s.f.)Top buyers (s.f.) Average Class A sale price p.s.f. YTD transaction volume at a glance Total volume Number of transactions Average Class A cap rate range YTD sales activity Warehouse/Dist. sales volume as % of total Manufacturing sales volume as % of total Building address Buyer company Transactions details Seller company YTD sales volume by submarket Sales price $ $24,500,000 4500 Progress Boulevard Trident Capital Group 5101 Jeff Commerce Drive Kelly Development Johnson Development *Purchased as part of portfolio 3,439,428 s.f. $225,911,342 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. 4,000,000 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) 19% 16% 12% 9% 9% 9% 8% 7% 6% Exeter Colony Capital Tratt Properties IAC JW Mitchell Dream Industrial REIT MDH Pinchal Stoltz Real Estate Sperber Familly Trust 16% 12% 12% 9%9% 9% 8% 7% 6% Dermody Opus Medline Kelly Development Columbia Property Investors Transwestern Johnson Development Gray Jefferson United Atalaya Investments TCG Progress FCI $77,281,469 $55,200,000 $54,679,873 $38,750,000 Bullitt County East Airport Southern Indiana $220,411,342 11 $71 5.00% - 5.75% 100.0% 0.0% Top sales transactions YTD Size (s.f.) $ p.s.f. Sale date Pinchal 250,000 $13,125,000 $52.50 Sep-19 Exeter Medline 400,000 $20,800,000 $52.00 Sep-19 JW Mitchell Columbia Property 303,369 $47,900,000 $157.89 Sep-19 Exeter 134,888 $6,289,873 $51.00 Aug-19 301 Logistics Avenue Tratt Opus 426,450 $25,600,000 $60.00 Jun-19 Stoltz Real Estate Jefferson United 210,000 $17,850,000 $85.00 May-19 9101 Minor Lane IAC 324,991 $77.00 May-19 100 Brooks Way MDH 259,960 $16,500,000 $64.00 May-19 857 Park Loop Road* Colony Capital Dermody 546,000 $26,489,801 $47.00 Feb-19 5101 Jeff Commerce Drive Kelly Development Johnson Development *Purchased as part of portfolio Building address Buyer company Transactions details Seller company YTD sales volume by submarket Sales price $ $24,500,000 4500 Progress Boulevard Trident Capital Group 101 Lewman Way Gray Average Class A sale price p.s.f. YTD transaction volume at a glance Total volume Number of transactions Average Class A cap rate range YTD sales activity Warehouse/Dist. sales volume as % of total Manufacturing sales volume as % of total 12900 Plantside Drive 1065 Conestoga Parkway Top sellers (s.f.)Top buyers (s.f.) $225,911,342 3,439,428 s.f. 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. 4,000,000 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) 19% 16% 12% 9% 9% 9% 8% 7% 6% Exeter Colony Capital Tratt Properties IAC JW Mitchell Dream Industrial REIT MDH Pinchal Stoltz Real Estate Sperber Familly Trust 16% 12% 12% 9%9% 9% 8% 7% 6% Dermody Opus Medline Kelly Development Columbia Property Investors Transwestern Johnson Development Gray Jefferson United Atalaya Investments TCG Progress FCI $77,281,469 $55,200,000 $54,679,873 $38,750,000 Bullitt County East Airport Southern Indiana $180,429,873 9 $76 5.00% - 5.75% 100.0% 0.0% Top sales transactions last 12 months Size (s.f.) $ p.s.f. Sale date Pinchal 250,000 $52.50 Sep-19 Exeter Medline 400,000 $52.00 Sep-19 JW Mitchell Columbia Property 303,369 $158.00 Sep-19 Exeter 134,888 $51.00 Aug-19 301 Logistics Avenue Tratt Opus 426,450 $60.00 Jun-19 Stoltz Real Estate Jefferson United 210,000 $85.00 May-19 9101 Minor Lane IAC 324,991 $77.00 May-19 100 Brooks Way MDH 259,960 $64.00 May-19 $6,289,873 $25,600,000 $17,850,000 $16,500,000 5101 Jeff Commerce Drive Kelly Development Johnson Development Building address Buyer company Transactions details Seller company 12 month sales volume $ by submarket Sales price $ $24,500,000 4500 Progress Boulevard Trident Capital Group 101 Lewman Way Gray 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 range Sales activity by building type last 12 months Warehouse/Dist. sales volume as % of total Manufacturing sales volume as % of total 12900 Plantside Drive 1065 Conestoga Parkway Top sellers (s.f.)Top buyers (s.f.) $13,125,000 $20,800,000 $47,900,000 $180,429,873 2,433,408 s.f. 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. $0 $50,000,000 $100,000,000 $150,000,000 $200,000,000 Warehouse / Distribution Sum of Price ($) Sum of RBA (SF) 27% 18% 13% 12% 11% 10% 9% Exeter Tratt Properties IAC JW Mitchell MDH Pinchal Stoltz Real Estate 18% 16% 13% 12% 11% 10% 9% Opus Medline Kelly Development Columbia Property Investors Johnson Development Gray Jefferson United TCG Progress FCI $55,200,000 $49,179,873 $38,750,000 $37,300,000 East Airport Southern Indiana Bullitt County
  • 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 (%) 27.5% Total speculative at delivery (s.f.) 1,386,848 Total BTS at delivery (s.f.) - Total owner-user at delivery (s.f.) 1,887,000 Total # of properties delivered 9 Asking rental rate (low - high) $4.10 - $4.95 Largest projects last 12 months Building/Address RBA (s.f.) Delivery date Leased at delivery (%) Medline Distribution Center 1,100,000 Q2 2019 100% Niagara River Ridge 469,000 Q3 2019 100% Dermody Renaissance South 352,800 Q1 2020 0% New Cut Center Bldg 2 331,928 Q4 2019 0% 4301 Produce Road 318,000 Q2 2019 100% Exeter New Cut 252,080 Q1 2020 0% Total pre-leased (%) 3.4% Total speculative under construction (s.f.) 4,971,905 Total BTS under construction (s.f.) - Total Owner-user under construction (s.f.) - Total # of properties UC 10 Asking rental rate (low - high) $3.95 - $5.25 Largest projects currently under construction Building RBA (s.f.) Delivery date Pre-leased (%) Bourbon Logistics Center 1,040,158 Q2 2020 0% Logistics Airpark 931,907 Q4 2020 0% Velocity 65 Trade Center Bldg. 2 908,600 Q4 2020 0% Silver Creek Logistics, Bldg. A 659,790 Q2 2020 0% Greenbelt Logistics Center 314,500 Q3 2020 0% Last Mile Logistics Center 283,820 Q2 2020 0% Speculative Speculative Speculative Speculative Airport Riverport Bullitt County Speculative Core5 Eagle Pointe Browning Southern Indiana Clarion Owner-user Submarket Under construction 4,971,905 Under construction (s.f.) Under construction in-depth Upcoming deliveries by year (s.f., excludes YTD completions) Airport Exeter Property Group Speculative Owner Construction type New and historical deliveries Completions in-depth 3,273,848 Total delivered past 12 months (s.f.) Construction typeOwnerSubmarket Airport Airport Airport Southern Indiana Southern Indiana Premier Packaging Main Street Realty Dermody Niagara Bottling Medline Owner-user Owner-user Speculative Bullitt County Core5 Speculative Airport Nicklies Speculative 1,620,492 2,553,410 2,452,793 5,896,471 4,424,993 4,085,552 2,877,960 754,880 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 2013 2014 2015 2016 2017 2018 2019 2020 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 2020 Speculative Q1 2020 Construction Louisville Industrial Outlook This report analyzes all industrial developments under construction & new deliveries > 100,000 s.f. © 2020 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 2020 Construction Louisville Industrial Outlook 1 Location: 200 Velocity Way Square feet: 908,600 Tenant(s): None Landlord: Browning 1 2 Location: 5530 Minor Lane Square feet: 931,907 Tenant(s): None Landlord: Nicklies 2 3 Address: 170 Clermont Drive Square feet: 1,040,158 Tenant(s): None Landlord: Core5 3 © 2020 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. 4 4 Address: 6611 Shepherdsville Road Square feet: 283,820 Tenant(s): None Landlord: Core5
  • 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 2020 Employment Louisville Industrial Outlook 3.5%U.S. unemployment 1.5%U.S. 12-month job growth 3.9%Louisville unemployment 0.8%Louisville 12-month job growth 4.2%Kentucky unemployment 0.7%Kentucky 12-month job growth -5.0 0.0 5.0 10.0 15.0 20.0 2015 2016 2017 2018 2019 2020 Trade, Transportation & Utilities Manufacturing Other Services Mining Logging & Construction 0% 4% 8% 400,000 500,000 600,000 700,000 800,000 2015 2016 2017 2018 2019 2020 Employment Unemployment Employment vs. unemployment rate Employment by industry Job growth (12-month change) -1,400 -1,200 -800 -700 -200 -200 1,800 2,000 2,400 3,500 -4,000 -2,000 0 2,000 4,000 6,000 Trade, Transportation &… Mining, Logging & Construction Government Manufacturing Information Other Services Financial Activities Leisure & Hospitality Educational & Health Services Professional & Business… Job growth* Historical employment Job growth by sector* Employment by industry Industrial employment* * Represents 12-month change in employment. All charts represent economic conditions through January 2020, which was the latest data available at the time of publishing this report. © 2020 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 2019 2020 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 About JLL JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. Our vision is to reimagine the world of real estate, creating rewarding opportunities and amazing spaces where people can achieve their ambitions. In doing so, we will build a better tomorrow for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $16.3 billion, operations in over 80 countries and a global workforce of more than 93,000 as of September 30, 2019. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit 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. © 2020 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.