Lou-ups-worldport-fullsize (2) The UPS Worldport hub in Louisville is the company’s largest air facility, and has attracted a host of e-commerce operations.

LOUISVILLE—The Louisville industrial market posted the fourth largest annual absorption number in its history in 2017 with 2,503,335 square feet, according to a new report from CBRE. Much of the expansion was driven by a diverse group of large new to market tenants, who helped make this the 11th straight quarter with positive absorption.

“In 2017, we had a good mix of manufacturing and e-commerce firms,” Tom Sims, senior vice president, tells GlobeSt.com. Like several other Midwest metro areas, Louisville has several major auto plants, and the industry’s present strength has attracted a group of parts suppliers. In addition, the presence of the UPS Worldport hub, the company’s largest air facility, creates the need for many warehouses and distribution centers.

The central location of Louisville allows UPS equal access to the entire US, and truck drivers have also found the area convenient. “More than 60% of the population can be reached in one day’s drive,” Sims says, “and that reduces both days in transit and transportation costs.”

Louisville remains one of the fastest growing markets in the Midwest. Vacancy now sits at 7.1% for the market as a whole, with the largest industrial submarket, Southside/Airport, enjoying a 3.2% rate.

Significant transactions for the fourth quarter include:

  • Ring Container, a new-to-the-market plastic container manufacturer, leased 155,490 square feet in Riverport Distribution Center at 5808 Johnsontown Rd. in the Riverport submarket.
  • Logistics company EasyPost entered the Louisville market with a 328,669-square-foot lease in the Riverport submarket.
  • Medical supplies manufacturer and distributor Medline filed plans for a 1.1 million-square-foot distribution warehouse in the River Ridge Commerce Center development in the Southern IN submarket. If completed, the building would become the submarket’s largest building and the Louisville industrial market’s second largest distribution building.

Other developers have also been quite active. They completed just over four million square feet of industrial product in 2017, and plan to finish another 4.6 million square feet during the first half of 2018. That includes a 1.46 million square foot facility in the Southside/Airport submarket.

And although there is a good amount of spec space in the pipeline, Sims believes it will get absorbed. “We’re seeing a lot of activity in the first quarter, and we hope that translates into another strong year. I don’t expect we will see a shortage of space or a surplus.”