Industrial Market Trends Louisville, KY Integra Realty Resources May 2014 November 2014

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1 Industrial Market Trends Louisville, KY Integra Realty Resources May 2014 November 2014 OVERVIEW This survey aggregates data from approximately 400 industrial properties in the Louisville MSA. The Louisville MSA industrial market surveyed is divided into 10 submarkets. Industrial buildings that are 30,000 square feet total gross leasable area or greater in size are surveyed. This report only tracks industrial properties that are leased or available for lease and omits owner-occupied industrial properties. Vacancy rates increased over last period in areas 3, 5, and 10, with areas 1, 7, 8 and 9 reporting no change. All other areas experienced decreased vacancies. The current average effective rental rate of $3.91/s.f. is slightly lower than last period s rate of $3.95/s.f. These rates are an average of all flex and distribution space, including associated office. The estimated absorption for this period is 926,082 square feet. NODE AREA IDENTIFICATION Areas 1 & 2: North Jefferson County Area 3: Southwest Jefferson County Area 4: South Jefferson County Area 5: Southeast Jefferson County Area 6: East Jefferson County Area 7: Northeast Jefferson County Area 8: Southern Indiana Area 9: Bullitt County Area 10: Other Kentucky Counties-Oldham & Shelby Counties Louisville MSA Industrial Market Trends For more information, please contact: Laura Diaz Integra Realty Resources Kentucky-Southern Indiana 6100 Dutchmans Lane, Suite 601 Louisville, Kentucky T: E: ldiaz@irr.com F: Louisville MSA Industrial Survey 2014 Integra Realty Resources Kentucky-Southern Indiana 1

2 Total Gross Leasable Area (G.L.A.) by S.F. Areas 1 & 2 Area 3 Area 4 Area 5 Area 6 Area 7 Area 8 Area 9 Area 10 TOTALS NOV ,795,955 6,815,499 9,326,623 7,318,013 4,568,234 3,209,487 7,255,996 9,289,909 1,648,052 56,227,768 Total G.L.A. Available (S.F) 1,460,411 1,778,943 1,699,132 1,218, , ,392 2,076,884 1,395, ,973 10,806,315 Market % 12% 12% 17% 13% 8% 6% 13% 17% 3% 100% Vacancy Rate 21% 26% 18% 17% 8% 8% 29% 15% 35% 20% Estimated Absorption (S.F) -9,003-69, , ,500 14, , , ,082 OFFICE/WAREHOUSE Flex space is classified as office/warehouse when the office component is greater than 15% of the total space. Approximately 10% of industrial space tracked in this report is considered office/warehouse space. The vacancy rate for office/warehouse is 21%, an decrease of 4% over last period. WAREHOUSE/DISTRIBUTION Facilities are classified as warehouse/distribution when the office space component is less than 15% of the total space. Approximately 90% of the space tracked this period is considered warehouse/distribution space. The vacancy rate for warehouse/ distribution is 19%, no change over last period. Louisville MSA Industrial Survey 2014 Integra Realty Resources Kentucky-Southern Indiana 2

3 AREAS 1 & 2 (North Jefferson County) Total gross leasable area is 6,795,955 square feet. The average vacancy rate for this period is 21%, and the average effective rent is $3.47 per square foot. AREA 3 (Southwest Jefferson County) Total gross leasable area is 6,815,499 square feet. The average vacancy rate for this period is 26%, and the average effective rent is $3.51 per square foot. AREA 4 (South Jefferson County) Total gross leasable area is 9,326,623 square feet. The average vacancy rate for this period is 18%, and the average effective rent is $3.72 per square foot. Louisville MSA Industrial Survey 2014 Integra Realty Resources Kentucky-Southern Indiana 3

4 AREA 5 (Southeast Jefferson County) Total gross leasable area is 7,318,013 square feet. The average vacancy rate for this period is 17%, and the average effective rent is $4.57 per square foot. AREA 6 (East Jefferson County ) Total gross leasable area is 4,568,234 square feet. The average vacancy rate for this period is 8%, and the average effective rent is $4.50 per square foot. AREA 7 (Northeast Jefferson County) Total gross leasable area is 3,209,487 square feet. The average vacancy rate for this period is 8%, and the average effective rent is $4.81 per square foot. Louisville MSA Industrial Survey 2014 Integra Realty Resources Kentucky-Southern Indiana 4

5 AREA 8 (Southern Indiana) Total gross leasable area is 7,255,996 square feet. The average vacancy rate for this period is 29%, and the average effective rent is $3.76 per square foot. AREA 9 (Bullitt County) The gross leasable area is 9,289,909 square feet. The average vacancy rate for this period is 15%, and the average effective rent is $3.52 per square foot. AREA 10 (Oldham and Shelby Counties) The gross leasable area is 1,648,052 square feet. The average vacancy rate for this period is 35%, and the average effective rent is $3.37 per square foot. Louisville MSA Industrial Survey 2014 Integra Realty Resources Kentucky-Southern Indiana 5

6 Glossary Class A Space Class B Space Class C Space Effective Rental Rate Office/Warehouse Street Rent Warehouse/Distribution Space that is renting for $3.00 per square foot or more for warehouse/ distribution space, or $5.50 per square foot or more for office/warehouse space, for the purposes of this survey. Space that is renting between $1.51 and $2.99 per square foot for warehouse/distribution space, or between $2.51 and $5.49 per square foot for office/warehouse space, for the purposes of this survey. Space that is renting for $1.50 per square foot or less for warehouse/ distribution space, or $2.50 per square foot or less for office/warehouse space, for the purposes of this survey. The average rent received for space over an extended period of time, based on Common Respondents responses. An industrial structure whose office space exceeds 15% of the total gross leasable area. The current asking rent for a particular building. An industrial structure whose office space is less than 15% of the total gross leasable area. Louisville MSA Industrial Survey 2014 Integra Realty Resources Kentucky-Southern Indiana 6