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Market Report

Louisville Multifamily Market Report

2024 Investment Forecast

Shrinking Office Employment Impacts Class A Sector;
First-Ring Suburbs Attract Capital

Lower-tier leasing to restrain rising overall vacancy rate. The metro’s traditional office-using sectors have noted attrition since late 2022, in turn slackening conditions in Class A and B rentals. Nevertheless, the metro boasts a roster of stalwart tenants that anchor the metro’s office corridors, including Humana, Yum! Brands and Baird. The latter firm even noted a landmark expansion at the former PNC Tower last year. These employers remain committed to the market, providing a solid backstop for employment even as general white-collar recruitment hits some speedbumps, which should mitigate vacancy decompression in upper-tier apartments. The metro’s broader employment outlook is also more positive, with a slow but steady increase likely to keep Class C vacancy in line with the historical average. Certain fields, such as the manufacturing and construction sectors, noted multi-decade highs in staffing counts in late 2023, which should facilitate demand for lower-tier apartments this year. The education and health services sector also noted record employment during that span. The wide spectrum of incomes these industries provide will act as a support for leasing across all apartment classes.
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