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LOUISVILLE, KY-ProLogis, which recently began construction on a 273,000 sf expansion at ProLogis Park 65, also has started working on plans to erect a 500,000-sf building in nearby Cedar Grove Business Park. The decision to expand in the Louisville market was fueled in part by strong third-quarter leasing activity at its master-planned distribution park near Kentucky's Louisville International Airport.

Last quarter, the Denver-based provider of distribution facilities and services inked deals totaling more than 550,000 sf at ProLogis Park 65, eight miles south of the airport on Interstate 65. The transactions included a lease for 161,000 sf with UPS Supply Chain Solutions Inc., a package delivery company and supply chain service provider, and an expansion to 275,000 sf from 200,000 sf by AmerisourceBergen Specialty Group, a Dallas-based provider of specialty pharmaceutical services. Terms of the transactions were not released, but space at the park lists for $3.35/sf with a $2/sf tenant improvement allowance.

Darin Manning, a ProLogis vice president and market officer, notes that demand for class A industrial space in Louisville is increasing. He reports 1.2 million sf of absorption during the third quarter and 2.5 million sf of absorption year to date in the 36 million sf universe tracked by his company.

For ProLogis Park 65, location has been a major selling point. "The park continues to benefit from its proximity to the airport and the UPS Worldport hub here, which serves as an important amenity for companies distributing products regionally and nationally via air freight," Manning says. For tenants, proximity to the UPS Worldport hub typically translates into expedited delivery times and reduced shipping costs.

Construction of the ProLogis Park 65 expansion began this month. The project will add 273,000 sf to building No. 2 and will bring the two-building park to its maximum capacity of 1.2 million sf.

Manning says ProLogis also is planning to build a 500,000-sf facility in Cedar Grove Business Center along Interstate 65 in Shepardsville. That project is in the design phase. ProLogis's other assets in the park are the 527,250-sf Cedar Grove #1 and the 382,800-sf Cedar Grove #2. Reynolds Food Packaging/Alcoa leases 100% of Cedar Grove #1, which is expandable by 300,000 sf. Cedar Grove #2 is occupied by APL Logistics at 215,360 sf, and Alliance Entertainment Group at 167,440 sf.

ProLogis is a major provider of industrial distribution facilities in Louisville, with approximately 4.7 million sf of industrial space owned, managed and under development.

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