Louisville Office Investment Forecast
Limited Construction Provides Path to Lower Vacancy;
Investors Stick to Areas Resilient During the Pandemic
Constrained development facilitates tighter market conditions. Rents have returned to a positive growth territory in Louisville heading into this year, and the metro should sustain rent gains in the near term as more firms, such by Humana, return to offices. Demand for space will surpass pre-pandemic levels this year, while subdued deliveries will allow for moderate vacancy tightening and slight rent growth. Tenants have favored Class A office projects, including nearly all of the space in buildings that came online in 2021. The construction that is moving forward this year is primarily in the eastern suburbs, potentially the result of developers targeting areas closer to residential neighborhoods that are less impacted by pandemic-related shifts in office use than the central districts. The only major project slated to open in the core is the 40,000-square-foot Norton Healthcare Office, which is fully pre-leased.