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Market Report

Louisville Office Market Report

2024 Investment Forecast

Some Assets Benefiting from Corporate Consolidation;
Suburban Vacancy Lowest in Nation

Outlying offices and amenity-rich towers positioned to weather headwinds. Larger tenants with the resources for hybrid workplaces will likely continue to consolidate footprints, a process that will disproportionately impact the CBD. Still, this shift could benefit recently-built or renovated assets, exemplified by the number of leases executed at downtown’s Baird Tower. In the latter half of 2023 alone, several agreements totaling more than 90,000 square feet were signed at this property, exceeding the net absorption total for the urban core during each quarter noted last year. Owners of more challenged vintage assets may also choose to rehabilitate properties or opt for conversion, as downtown Class B and C inventory is likely to see vacancy increase at a greater margin than the market average. On a more positive note, Louisville’s suburban offices are well positioned in 2024. These locales saw declining vacancy in 2023, with a 7.6 percent rate recorded late last year marking the lowest such metric in any major metro nationwide. A notable dearth of speculative construction should keep conditions tight, particularly north of the Ohio River, where Clark County submarkets observe vacancy as low as 1.0 percent.

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