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| Photo by Boris Ladwig In the 12 months between first quarter Real Estate Marketing 2016 and 2017, building developers delivered almost 6 million square feet of space to the industrial real estate market, which includes fulfillment centers, warehouses, production, storage, assembly and clean manufacturing. “That’s a huge number,” says Powell Spears, managing director of brokerage for real estate firm JLL . “Prior to all this growth here, a good year in Louisville would have been an additional 2 million square feet of net absorption. A great year would have been 2-and-a-half million.” “All this growth” refers to the large industrial centers that have been built at River Ridge in Southern Indiana, in Bullitt County and on the I-65 corridor close to Louisville International Airport and the UPS Worldport. “You can call us an Inland Port now,” says Spears, “because of UPS and the growth here of Federal Express. It only reinforces the fact that Louisville is now a proven and established distribution market. Developers from around the country used to come here, look around and go home to think about it. Now they’re staying, investing and building.” The industrial vacancy rate in the market has jumped recently, now at 10.2 percent after a historically low 5.7 percent in 2015. But still, says Spears, we’ve had a good track record over the last five years of filling vacant space. The reason for the rising vacancy rate is not lack of interest, he says, but because of aggressive development. In 2009-11, there was zero speculative development.
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