Louisville, KY Economic Overview
Louisville is the largest city in Kentucky and is home to nearly 1.3 million people. Situated along the Ohio River, the city offers an affordable cost of living and life style, and is also a magnet for business of all types. Louisville's location is key to the local air, water and land shipping industries, and the city is also home to scores of companies across all business lines. The diverse mix of business and industry continue to drive the commercial real estate market in Louisville.
Encompassing 15 counties, the Greater Louisville region is home to over 39,000 businesses across all industry lines. Louisville is within a single day's drive of over 66% of the population in the United States. In addition to the shipping and manufacturing industries in Louisville, an increasing number of employers in the health care, high-tech, and tourism industry are based in the region.
With a median household income of nearly $53,000 and an average salary of just over $43,000 per year, business in Louisville has access to a skilled labor pool at an affordable wage point. Income growth in Louisville posts at just under 4% annually, and with an unemployment rate of slightly over 4% and the employment base growing at nearly 2% annually, the economy in Louisville is expected to remain strong for quite some time.
Louisville, KY Commercial Real Estate Market
Over the past few years, the manufacturing industry in Louisville has grown by more than 30%, so much so that Forbes Magazine named the city the #1 location in the U.S. where manufacturing is thriving. There are five main industry clusters that are responsible for the growth of the Louisville industrial real estate market:
- Advanced manufacturing - Louisville was named a manufacturing 'boom town' for two years in a row
- Business services - such as back office operations and high-tech, niche consulting.
- Food and beverage - from distilled liquors, to large national restaurant headquarters, to eclectic venues on the locally-owned restaurant scene.
- Wellness and aging - Louisville has the largest concentration of these companies in all of the U.S.
- Logistics - The UPS WorldPort air hub and Louisville's unique central geographic location allow 66% of the country's population to be reached overnight.
The combined six industrial submarkets of the Louisville region - Central, East, South, West/Southwest, Bullitt County, and Southern Indiana - are home to nearly 155 million square feet of space, with nearly 6 million square feet brought to the market just last year and nearly 8 million square feet more in the pipeline, as of mid-2017. Demand for industrial space in Louisville continues to increase, with vacancies moving downward, and absorption and asking rents moving up.
The Central Business District and seven suburban office submarkets encompass over 20 million square feet of Class A, Class B, and Class C office space. With about $1.2 billion in new private development in the Central Business District, the outlook for the office leasing market in Louisville remains strong, with asking rents in the Louisville region staying consistent and absorption on the rise. The retail market in Louisville has a healthy mix of both power and regional malls combined with neighborhood and community shopping centers. With only one 363,000 square feet speculative retail project in the works, and regional household income and population growth on the increase, the overall vacancy rate for retail space in Louisville has been steadily declining year over year.
Louisville, KY Office Sales Volume
Data provided by Yardi Matrix, for properties larger than 50K SF, which sold at over $5M.
Louisville, KY Office Transactions
Data provided by Yardi Matrix, for properties larger than 50K SF, which sold at over $5M.
Louisville, KY Commercial Inventory Breakdown
Total: 27,569,549 SF
By square footage range:
- 50k to 100k SF: 7,659,517 SF / 27.78% of total office
- 100k to 500k SF: 15,428,380 SF / 55.96% of total office
- 500k to 1M SF: 4,481,652 SF / 16.26% of total office
- Class A: 11,097,539 SF / 40.25% of total office
- Class B: 14,366,417 SF / 52.11% of total office
- Class C: 397,108 SF / 1.44% of total office
Employment in Louisville, KY
With a regional employment base of nearly 620,000 workers, job growth in Louisville has increased by nearly 2%, and the unemployment rate has been steadily declining year by year, to just over 4%. Over 55% of the labor force works in management, health services, transportation and material moving, administration, sales, and production. Major employers in the Louisville regional area include YUM! Brands, United Parcel Service, Humana Inc., Brown- Forman Corporation, Ford Automotive, and GE Appliances.
With the average annual salary in Louisville at 10% lower than the U.S. average, and an overall affordable cost of living, business in the region has access to a well educated, diverse and cost- effective labor force.
Education in Brooklyn, NY
The Jefferson County Public School district in Louisville educates more than 100,000 students in its 173 primary, middle, and secondary schools. There are also numerous private schools in the Louisville region, including 27 Catholic schools.
The University of Louisville, Bellarmine University, Boyce College, Spalding University, Sullivan University, and Simmons College of Kentucky are the six post-secondary educational institutions in the Louisville region.
Commuting Time in Louisville, KY
Residents of the Louisville area have a relatively short commute time, of just over 23 minutes each day, which is below the national average of 24.8 minutes. Carpooling in the region is a popular commuting option, with nearly 9% of the work force choosing this method, while almost 4% are able to work at home.
The integrated land, river and air transportation infrastructure of Louisville is a boon for business and industry in the region as well:
- U.S. Interstate highways I-264, I-265, I-64, and I-65 all pass through Louisville.
- The two major freight railroads of CSX Transportation and Norfolk Southern connect Louisville to the rest of the region and the U.S.
- The Port of Louisville is located at the Jefferson Riverport International, ranking the city as the seventh-largest inland port in the U.S.
- United Parcel Service's worldwide air hub, WorldPort, is based at the Louisville International Airport.
- In addition to the Louisville International Airport, the region is also served by the airports at Fort Knox, Bowman Field and Clark Regional Airport.
- Total Population738,336
- Male Population(48.3 %) 356,791
- Female Population(51.7 %) 381,544
- Median Age37.00
- Average Household Income$79,784
- Median Household Income$51,398
- Median Income Under 25$26,867
- Median Income 25-44$56,932
- Median Income 45-64$61,481
- Median Income Over 65$36,000
Residential Rents in Louisville, KY
Louisville offers a better cost of living value than similarly sized areas, due in part to the affordability of the housing market in the region, with costs running 20% lower than the national average.
With annual rents increasing by close to 4% a year, a one-bedroom unit goes for under $800/month, while three- and four-bedroom places rent for $1,200/month and $1,500/month, respectively. The neighborhoods of Schnitzelburg, Clifton, and Cherokee Triangle command the highest monthly residential rents in Louisville, while Highlands, Chickasaw, and Shawnee offer the lowest rents in the city.
Louisville, KY Average Rental Price, September 2019
- $ 891/mo
- Studio: $ 670
- 1 Bedroom: $ 784
- 2 Bedrooms: $ 897
Louisville, KY Rent Trends
2019 US Office Pipeline – NYC, the Bay Area and San Francisco Set to Deliver 33 MSF of Office Space
April 10, 2019
Since 2009, the U.S. economy has had more than 110 consecutive months of growth, making this the second longest economic expansion since the Great Depression. After a rather tepid 2017 performance, the U.S. office market gathered some steam in 2018, adding 76 million square feet of new office sp...
2018 Office Check-In: Top US Markets for Development, Largest Projects of the Year
September 20, 2018
We’re almost halfway through H2 2018, and it’s high time to check up on construction activity, as well as the state of the U.S. office pipeline when compared to previous analyses. Last year around the same time, we looked at top U.S. cities for office delivery during the fall-winter season, and ...
Looking to Relocate Your Business? Phoenix is Your Best Bet
November 01, 2017
Amazon’s search for a new home has stirred up city officials and developers across the country, and 238 applicants across North America have expressed interest in housing the company’s next headquarters. Of course, the retail giant has a few requirements: the chosen metropolitan area should idea...
COMMERCIALCafé is your first and only stop when it comes to commercial real estate leasings in Louisville, KY. Search through our extensive selection of commercial properties for lease with current space availability in the area ranging between 1830 square feet and 222000 square feet. Discover the right property from our 296 listings by using our advanced search function, which includes search by property type, space availability, management company, lease rates, and more.