Kentucky

Limited multifamily rental development and additional hiring by local employers will sustain another strong year for the Louisville apartment sector during 2012. Despite a slight increase in vacancy during the first three months of the year, tight conditions prevail as many residents moved into apartments during the past two years. Local employers expanded payrolls during the past two years and more than half of the jobs lost in the metro during the recession have been recovered. The market continues to benefit from the revival of Ford, while the area’s logistics and transportation employers have added workers as more packages and freight move through Louisville en route to other markets. The reinvigorated drivers of apartment demand continue to benefit most locations around the metro, but none more than the submarkets encompassing suburban communities located beyond the inner beltway. Overall vacancy in this area, which contains about three-fourths of the market’s apartments, sits at less than 4 percent, with the Class A rate closer to 3 percent. A lack of new construction will keep rents and vacancies healthy in the Louisville metro area. The 35-unit Whiskey Row Lofts in the West Central submarket delivered in the first quarter, becoming the only market-rate …

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As 2012 begins the Louisville retail market continues to positively move forward. The energy and optimism in the national markets is well reflected in the city with new tenants entering the area for the first time and a variety of locals, regional and national players looking to expand. The greatest challenge currently in the market is the scarce availability of quality space which is hindering some retailers’ entry into the market today and could seriously affect future growth. Fall 2011 saw Guitar Center, Nike Factory Store and Trader Joe’s all opened in Shelbyville Road Plaza in the city’s main retail core, St. Matthews. While the influx of new tenants is positive, the ownership still must re-tenant vacant boxes left by Circuit City, Wild Oats and Border’s Books. Most recently, Anthropologie announced that it would join Macy’s, Sear’s and Von Maur at Oxmoor Mall further solidifying Oxmoor as the city’s premier upscale shopping destination. Mall St. Matthews continues to be well occupied while appealing to a slightly younger clientele. Other new additions to St. Matthews trade area include Mellow Mushroom Pizza, Tin Roof and Bruegger’s Bagels. The biggest news in the northeast segment of the trade area was the $78 million …

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Industrial developers in the Louisville area are struggling to remain busy at a time when construction starts are non-existent. The area usually attracts logistics companies and distribution firms that benefit from Louisville’s location and the city’s transportation routes. But today, tenants simply aren’t interested in building new properties, and developers can’t secure the financing needed to construct speculative developments. “Most developers are hurting right now,” says Michael Norris of Ray & Associates/TCN Worldwide. “A lot of developers are struggling to make their financial obligations.” New development has stopped, but tenants and buyers are still looking around, searching for good deals. In the past two quarters, Norris has seen a few 100,000-square-foot leases in Louisville; this isn’t much compared to pre-recession activity, but it means the market is still moving. According to CB Richard Ellis, more than 32 firms were looking for spaces of more than 100,000 square feet during the second quarter. Big leases in the second quarter include Motorcycle Superstore’s 126,000-square-foot lease and CAT Logistics 50,000-square-foot lease. In order to attract these deals, landlords are piling on the incentives. “Landlords are getting creative, either offering additional TI or offering several months of free rent. They have to offer the …

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During the past 12 months, the Louisville retail real estate market has proven itself to be full of opportunities as well as challenges. An almost equal amount of developments were completed since the beginning of last year as were put on hold. Likewise, as many stores have opened as have closed, and as many submarkets have thrived as have struggled. In spite of these inconsistencies, the Louisville market finds itself uniquely well-positioned for resumed retail growth as the national economy rebounds. The northeast and east retail submarkets remain extremely stable. Within these markets there are more than 2 million square feet of retail space including some of the city’s premier shopping destinations. The Summit, the city’s only lifestyle center, is more than 98 percent leased with a tenancy that boasts some of the most recognizable names in lifestyle retail and fast casual dining. Likewise, Springhurst Towne Center is more than 90 percent leased with the anchor tenants Target, Meijer, TJ Maxx, Liquor Barn and Dick’s Sporting Goods. The landscape will continue to evolve with the completions of Phase I of Chamberlain Pointe, a mixed-use center, and North Commons, a town center development. St. Matthews continues to be widely considered the …

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