Kevin A. Grove,

Senior Vice President
CBRE Louisville 

"Louisville’s industrial market continues to exhibit strong growth with 22 consecutive quarters of positive net absorption. The world’s fourth-busiest air cargo hub and central location make Louisville a prime site for any company seeking Midwest distribution space. Interest is coming from all sectors, including e-commerce, pharmaceuticals and retail. There also are five major auto assembly plants within 120 miles of Louisville, which creates significant demand for light manufacturing and assembly space. Rents will continue to increase and vacancies decrease as demand within Louisville remains robust."


Nearly 30 million people—23% of them in the 18-to-34 age demographic—live within 250 miles of downtown Louisville, with a 2.5% projected growth rate over the next five years. Louisville can reach a higher population concentration within a 250-mile radius than other major industrial markets, including the Inland Empire, Dallas-Fort Worth, Phoenix, Memphis and Kansas City.

Figure 1: Louisville Population Analysis
Distance from Downtown Louisville

Source: CBRE Location Intelligence.

An influx of industrial occupiers increased the number of warehouse workers in the region. According to CBRE Labor Analytics, 42,592 people work in the local distribution industry, with a forecast 18.4% increase over the next 10 years. The average salary for non-supervisory warehouse workers is $13.50 per hour, 2% below the national average.

Figure 2 : Warehouse & Storage Labor Fundamentals

Source: CBRE Labor Analytics.


Over the past five years, there have been 278 economic incentives deals totaling more than $235 million at an average of $12,665 per new job in the Louisville metropolitan area, according to CBRE Location Incentives.

Among the top incentive programs offered in Louisville is the Kentucky Business Investment (KBI) Program, which provides income tax credits and wage assessments to businesses engaged in manufacturing, agribusiness, headquarter operations, alternative fuel, renewable energy or carbon dioxide transmission pipelines. In order to qualify, companies must create and maintain an annual average of at least 10 new, full-time jobs for Kentucky residents during the span of the incentive agreement.

Another popular incentive program is the Kentucky Enterprise Initiative Act (KEIA), which provides companies with a sales and use tax refund for building and construction materials used to improve real property value. This refund is also available for research & development, data processing and flight simulation equipment.

Figure 3: Top Incentive Programs

Source: WAVTEQ.


The Louisville Muhammad Ali International Airport was recently named the world’s fourth busiest cargo hub by Airport Councils International. Ali International is home to UPS Worldport, one of the largest package handling facilities in the world. E-commerce is significantly increasing cargo flights in and out of the airport, where air package volume grew by 22% year-over-year in 2019. As e-commerce’s share of total retail sales continues to increase, more distributors are expected in the region to take advantage of its air cargo capabilities.


Industrial activity remains robust in Louisville with 22 consecutive quarters of positive net absorption, rental rate increases, strong construction activity and a low vacancy rate. Nearly 3 million sq. ft. of industrial space has been absorbed so far this year—more than the entire total for 2019. Strong absorption is attributed to increases in big-box transactions, including health-care technology company McKesson’s lease of a recently completed over 1 million sq. ft. building at Bourbon Trail Logistics Center in Shepherdsville, the largest speculative building ever constructed in the region.

Other construction completions in Q3 2020 included a 256,500-sq.-ft. speculative warehouse building at 200 Trey Street in Southern Indiana’s River Ridge Commerce Center and a 256,500-sq.-ft. warehouse expansion at 700 Omega Parkway in Shepherdsville. Five speculative construction projects and one build-to-suit are expected to add more than 2.3 million sq. ft. of inventory to the Louisville industrial market by the end of the year.

The future looks bright for the Louisville industrial market. The region has withstood the COVID-19 downturn with strong activity and low vacancy rates that, combined with the region’s logistical advantages and projected e-commerce sales growth, point to robust rental rate growth over the next five years. CBRE Econometric Advisors forecasts that Louisville industrial asking rents will increase by 38% over the next five years—the second highest growth rate in the country.

Figure 4: Louisville Historical Data

Source: CBRE Research, Q3 2020.

Figure 5: Louisville Size Range Comparison

Source: CBRE Research, Q3 2020.

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