Office Q Kentucky

Louisville's office market poised for strong 2019

Louisville's office market poised for strong 2019,ph01

Louisville’s office market ended 2018 with its third consecutive quarter of positive absorption, according to the Office MarketView report released earlier this year by CBRE. The report said that the Louisville region saw 128,804 square feet of office space absorbed in the fourth quarter of 2018.

During the quarter, the Louisville central business district saw 30,763 square feet of office absorption, while the city’s suburbs saw 98,041 square feet, CBRE reported.

The most important fact here? The fourth quarter marked the first that the city’s central business district enjoyed positive office absorption since the second quarter of 2017.

CBRE said that the Class-A office vacancy rate in the central business district dropped 70 basis points to 11.5 percent in the fourth quarter. This is the first time this rate has been below 12 percent since the fourth quarter of 2016.

“This was a good bounce-back year for the entire market,” said David Hardy, managing director for CBRE. “Tt was great to see positive absorption in the CBD last quarter, and the strength of the suburban market continues to draw interest from developers and investors as several new office projects have been completed and others are underway for 2019 delivery.”

CBRE said that Class-A office lease rates in the central business district rose to $19.80 a square foot in the fourth quarter. The marketwide average asking lease rate rose 33 cents a square foot to $17.95 a square foot.

The fourth quarter also saw one of the bigger office sales in the Louisville region. Real estate investment firm In-Rel Properties purchased the 16-story, 87,000-square-foot Kaden Tower in the St. Matthews submarket for $10.5 million in November.