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Market Report

Louisville Office Investment Forecast

2020 Outlook

Tenants Adhere to Metro Cost Efficiencies, Advancing Materialization of Lifestyle-Rich Office Communities

LLouisville delivers second tightest vacancy rate in the nation. C Suburban space has been a major component of office demand with trade, transportation, and logistics businesses moving into cost-effective locations to grow future operations. UPS, for example, recently announced a $750 million expansion beginning in 2020 to grow air express shipping performance and make additions to the firm’s operational offices and training centers. Leasing activity is robust near areas such as UPS’ corporate location in the eastern suburbs, where tenants with logistics synergies can flourish. All of the 286,000 square feet of development slated for delivery this year will also be concentrated in these areas. The largest project is a 140,000-square-foot speculative building, Two Olympia Park Plaza, comprising approximately half of this year’s construction. Despite speculative projects, landlords are confident in the substantial absorption of space with leasing activity expected to stay in close balance with supply in 2020, positioning vacancy in the 8 percent range for the fifth consecutive year.

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