Louisville Commercial Real Estate Market Report: Q1 2025 Data

October 3, 2026 at 4:00 AM

by Rob Bergeron

Louisville Commercial Real Estate Market Report: Q1 2025 Data

This edition covers first-quarter 2025 (January–March) market data, compiled and published by Winner Commercial in October 2026 as part of our quarterly report archive.

Every figure below comes from a research report published for that quarter. When a number wasn't published for Q1 2025, or the report wasn't publicly accessible, we say so instead of filling the gap. For the most current numbers, see the Q3 2026 edition.

Market snapshot: Q1 2025

Industrial vacancy rose to 4.0% from 3.6% in Q4 2024, but net absorption stayed positive at 221,016 square feet, per Cushman & Wakefield | Commercial Kentucky.
Big-box (bulk) industrial vacancy jumped to 7.1% from 5.3% as new speculative space delivered in Southern Indiana.
Office tenants gave back 254,308 square feet, nearly all of it in the suburbs, and overall office vacancy stood at 17.9%.
Apartment rents averaged $1,207 a month, up 0.9% year over year, with occupancy at 93.6%, per MMG Real Estate Advisors.
Apartment sales slowed sharply: 320 units sold in Q1 after 1,981 in Q4 2024, per Cushman & Wakefield | Commercial Kentucky.

Industrial

Cushman & Wakefield | Commercial Kentucky's Q1 2025 Industrial MarketBeat reported overall vacancy of 4.0%, up 40 basis points from 3.6% at year-end 2024. (A basis point is one-hundredth of a percentage point, so 40 basis points equals 0.4%.) Net absorption, the change in occupied space (move-ins minus move-outs), was a positive 221,016 square feet. That was well below Q4 2024's 1.7 million square feet, and the report tied part of the drag to Wolverine's expected departure, which created 519,000 square feet of negative absorption.

The vacancy increase came mostly from new supply. Southern Indiana led the market with 926,056 square feet of construction completions, and bulk vacancy rose to 7.1% from 5.3% even though bulk buildings absorbed 121,852 square feet. Overall net asking rent was $6.05 per square foot, up from $5.93 in Q4 2024. Leasing totaled 1.3 million square feet, down from 1.5 million in Q1 2024, with 855,102 square feet of that in bulk buildings.

About 4.8 million square feet was under construction (4,788,290), almost all of it bulk (4,652,766), and the report said over 54% of the bulk pipeline was speculative, meaning built without a signed tenant. Largest deals of the quarter:

FSK: 426,300-square-foot lease on Park Plaza Boulevard in Bullitt County.
A-1 Pallet: 146,575 square feet in Southern Indiana.
Danfoss: 132,352 square feet in the West/Southwest submarket.
A 908,600-square-foot investment sale at 200 Velocity Way in Bullitt County involving Prologis and Browning Investments.

By submarket, the East ran tightest at 0.7% vacancy, the South (about 60.9 million square feet, the largest) at 2.8%, Bullitt County at 5.4% with 840,064 square feet under construction, and Southern Indiana at 5.5% with 3.4 million square feet under construction. The report also noted growing data center interest across several submarkets and said new bulk inventory was expected to double in 2025 compared to 2024. For a corridor-by-corridor view, see our Louisville industrial corridors guide.

Office

Cushman & Wakefield | Commercial Kentucky's Q1 2025 Office MarketBeat put overall vacancy at 17.9%, with net absorption of negative 254,308 square feet. The suburbs took nearly all of the hit:

Central business district (CBD): 22.0% vacancy, net absorption of -33,419 square feet, overall asking rent of $17.89, Class A asking rent of $19.53.
Suburban: 14.8% vacancy, net absorption of -220,889 square feet, overall asking rent of $19.99, Class A asking rent of $21.26.
By building class: Class A 21.9% vacant at $20.41; Class B 15.0% at $16.77; Class C 1.6% at $14.24.

Overall asking rent was $18.89 per square foot. Leasing was light at 70,216 square feet. Vacant sublease space, which is space a tenant rents out to someone else, was 15,532 square feet downtown and 36,465 in the suburbs. Only 72,000 square feet was under construction, all downtown.

The report described Class B and C tenants continuing a "flight to quality" toward Class A buildings, and pointed to downtown revitalization efforts and likely office-to-residential conversions. Notable deals included Steptoe & Johnson's 16,617-square-foot lease at 101 South Fifth, Carewise Health's 14,195-square-foot renewal at 9200 Shelbyville Road, Terracon Consultants' 10,542-square-foot lease, and Block by Block's 7,376 square feet at 101 South Fifth. Separately, CBRE commentary published in Southeast Real Estate Business noted the Louisville Metro Housing Authority's 58,000-square-foot lease at the 500W building in Q1. More detail by area is in our Louisville office corridors guide.

Retail

We could not access a Q1 2025 Louisville retail report. Cushman & Wakefield's Q1 2025 Louisville retail MarketBeat was not publicly retrievable when we compiled this archive, and even when available that report is narrative, with no vacancy or rent table. So this edition does not print a Q1 2025 retail vacancy rate or asking rent. What we can document:

National store closures hit in the quarter. By mid-March 2025, Party City was closing nearly 800 stores, Joann was closing all of its stores, and Big Lots, Macy's and Kohl's were closing locations, per Axios. Those closures put second-generation boxes back on the market in most metros, including Louisville.
The next published Louisville read, Cushman & Wakefield's Q2 2025 retail report, showed that space getting backfilled: Burlington took the former Joann at Shelbyville Road Plaza, and backfill rents for second-generation space in prime locations ran in excess of $30 per square foot.

Commercial multifamily (apartment buildings)

MMG Real Estate Advisors' Q1 2025 report put Louisville's average rent at $1,207 a month, up 0.9% year over year. Occupancy was 93.6%, down 70 basis points from a year earlier. The market absorbed 475 units during the quarter against 562 completions. MMG said absorption was running 58% above pre-pandemic levels, but completions still outpaced demand, which kept pressure on occupancy and rent growth.

Cushman & Wakefield | Commercial Kentucky's Q1 2025 multifamily report counted 2,341 units completed over the prior 12 months, 3,117 under construction and more than 4,044 planned. Construction was concentrated in Okolona (936 units) and Jeffersonville, Indiana (1,042 units). Its submarket table showed wide spreads:

Springhurst: $1,567 average rent, 4.4% vacancy. Douglass Hills: $1,510 and 5.1%.
Jeffersontown: $1,339 and 6.2%. Okolona/Hillview: $1,252 and 3.6%.
Central/Downtown: $1,485 and 10.3%.
Southern Indiana: Jeffersonville $1,220 and 5.7%; Clarksville $1,178 and 9.8%; New Albany $1,105 and 5.1%.

Investment sales and cap rates

A capitalization rate (cap rate) is a property's net operating income (NOI) divided by its price. The Q1 2025 Louisville reports we reviewed did not state a quarter-specific cap rate in text (Cushman & Wakefield's multifamily report shows cap rates only as an unlabeled chart), so we are not citing one. The report did note the 10-year Treasury yield ended Q1 near 4.23%, down from 4.63% at the end of Q3 2024. Reported transaction activity:

Apartments: 320 units sold in Q1 2025, after 1,981 units in Q4 2024 and 4,168 for all of 2024.
Lakeside Gardens (360 units, Class B, Southern Indiana) sold to S&S Properties for $186,000 per unit.
Blankenbaker Crossing (236 units, Class B, East) sold to Morgan Properties for $165,000 per unit.
Industrial: the 908,600-square-foot sale at 200 Velocity Way in Bullitt County noted above.

What changed from the prior quarter (Q4 2024 to Q1 2025)

Industrial vacancy: 3.6% to 4.0%. Net absorption: 1.7 million square feet to 221,016. Net asking rent: $5.93 to $6.05. (Cushman & Wakefield)
Bulk industrial vacancy: 5.3% to 7.1%. Bulk under construction: 3.3 million square feet (over 67% speculative) to about 4.65 million (over 54% speculative).
Office: the Q1 2025 report did not restate Q4 2024 overall, CBD or suburban vacancy, and we could not access the Q4 2024 office report, so we are not printing an office vacancy change for this quarter. Q1 absorption was -254,308 square feet.
Apartments (MMG): average rent $1,189 to $1,207; occupancy 93.8% to 93.6%.
Apartment sales: 1,981 units in Q4 2024 to 320 units in Q1 2025.

One note on the bulk numbers: the Q2 2025 report later restated Q1 bulk vacancy at 6.2%, not the 7.1% first published. We show each figure as published in its own quarter.

What it meant for owners, buyers, and tenants

Industrial tenants looking for big blocks had more options than they did at year-end 2024, especially in Southern Indiana, where new deliveries pushed vacancy up. Small-bay tenants in the East and South saw little relief, with vacancy under 3%.

Office tenants in the suburbs gained leverage as move-outs added space, while downtown stayed above 22% vacant. Apartment owners faced flat-to-slightly-lower occupancy as deliveries outpaced absorption, and the slow sales quarter meant fewer fresh price points. For buyers, with no published Q1 cap rate, pricing came down to the rent roll and trailing NOI. Run the math with our commercial calculators, or request a free commercial property valuation.

Other editions in this archive

This archive is named by data quarter and covers Q2 2024 through Q1 2026. The newest numbers are in the Q3 2026 Louisville commercial real estate market report, and our Louisville commercial real estate hub links everything in one place. Other archive editions:

Talk to Winner Commercial

Winner Commercial works alongside Winner Realty. Rob Bergeron, Owner–Realtor (KY license #219325), has closed 2,000+ residential and commercial transactions since 2013, and our commercial track record lists 45 closed commercial deals. Sellers can also put a property in front of the 70,000+ buyers on OffMarket.deals. If you're weighing a sale, a purchase or a 1031 exchange, send us the property or call (502) 305-8915.

FAQ

What was Louisville's industrial vacancy rate in Q1 2025?

4.0%, up from 3.6% in Q4 2024, per Cushman & Wakefield | Commercial Kentucky. Bulk (big-box) vacancy was 7.1% as first published, and net absorption was a positive 221,016 square feet.

What was Louisville's office vacancy rate in Q1 2025?

17.9% overall per Cushman & Wakefield | Commercial Kentucky, with 22.0% downtown and 14.8% in the suburbs. Net absorption was -254,308 square feet, mostly suburban.

What was the average apartment rent in Louisville in Q1 2025?

$1,207 a month, up 0.9% year over year, with 93.6% occupancy, per MMG Real Estate Advisors.

What was Louisville's retail vacancy rate in Q1 2025?

No Q1 2025 Louisville retail vacancy rate was available in the public reports we could access. The next local read, Cushman & Wakefield's Q2 2025 report, described vacancy as very low in the eastern and northeastern suburbs but did not publish a rate.

Is this the most recent Louisville market report?

No. This is an archive edition covering January–March 2025 data. The newest edition is the Q3 2026 report.

Sources

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