Louisville Office Market Report

Nationally low vacancy rate poised to drop even further. Louisville entered this year as the third-least vacant major office market in the country, fueled by a sub-6 percent Class B/C rate. Availability was particularly tight, standing under 5 percent in early 2025 in South Clark County, Southeast Louisville, St. Matthews and Old Louisville, which together compose about a quarter of the market’s inventory. Class A vacancy was comparatively elevated at 17 percent exiting 2024, but was still tied for seventh tightest nationally. Top-tier vacancy specifically fell last year in Southeast Louisville and St. Matthews — areas that offer employers proximity to higher-income households and skilled labor. While new Class A leasing activity slowed in 2024, absorption on net is expected to improve over the course of this year, as less sublet space is being put on the market. Restrained development is also helping supply and demand better align, as this year’s 0.3 percent total increase to inventory marks the slowest pace since at least before 2007.