IRR-Louisville Mid-Year Viewpoint 2015 Local Market Report - Industrial
After several years of growth and a high volume of deals, the industrial market is beginning to show signs of slowing down. The first quarter saw slight negative net absorption, the first time since 2010. Park 480, a 500,000 s.f. facility in Bullitt County, sold in the first quarter for $47 per square foot. Across the MSA, new construction is underway at Airport Commerce Center (622,426 s.f.), 800 Patrol Road (468,731 s.f.) in River Ridge, and 421 Park Loop Court (401,848 s.f.) in Cedar Grove.
Additionally, several pad sites along Park Loop Road are building-ready. Saddle Creek Corp. has leased 320,000 s.f. of 800 Patrol Road, while Airport Commerce Center and 421 Park Loop Court are currently without lease commitments. Nationally, the purchase of KTR Capital by Prologis for $5.9B signals confidence in the industrial market and industrial properties as an asset class.
GE Appliance Park, with approximately 6,000 workers, is an integral part of the local economy. In early April, the park suffered a total loss of Building 6 due to fire. Electrolux’s purchase of GE’s appliance division, based in Louisville, is expected to win regulatory approval and close this year. This $3.3B acquisition will bring uncertainty to the market in the near-term, as Electrolux conducts reorganization and cost-saving measures. Nevertheless, to remain competitive GE is currently investing $250MM in upgrades at Appliance Park. While many local urban industrial properties have been adapted for reuse, market factors in Louisville’s West End still favor heavy industrial use. One bright spot for the area is the announcement of the West Louisville FoodPort, a regional food hub for locally sourced foods. Located on a 24-acre site owned by the city, the FoodPort combines local food with Louisville’s strength in logistics.
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IRR Mid-Year Viewpoint 2015 comprises a National Overview report and 300+ two-page Local Market Reports for all key property types as well as additional resources, including metrics methodology, graphs, and tables; these free reports may be downloaded from IRR’s site here.