Louisville Commercial Real Estate Market Report: Q1 2026 Data

October 3, 2026 at 4:00 AM

by Rob Bergeron

Louisville Commercial Real Estate Market Report: Q1 2026 Data

This edition covers first-quarter 2026 (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 two research firms measure the same market differently, we show both and explain why. When a number wasn't published for Q1 2026, we say so instead of filling the gap. For the most current numbers, see the Q3 2026 edition.

Market snapshot: Q1 2026

Industrial vacancy rose to 4.0% from 3.7% in Q4 2025, and net absorption turned negative (-12,047 square feet) for the first time in seven quarters, per Cushman & Wakefield | Commercial Kentucky.
Office asking rent hit $19.28 per square foot, which CBRE called the highest overall asking rate ever recorded in the market, while CBRE's vacancy rate fell 50 basis points to 22.8%. (A basis point is one-hundredth of a percentage point, so 50 basis points equals 0.5%.)
Suburban office stayed well ahead of downtown: 16.1% vacancy in the suburbs vs. 22.2% in the central business district (CBD), per Cushman & Wakefield.
Apartment rents rose 0.9% quarter over quarter to an average effective rent of $1,212 a month, with occupancy at 92.5%, per MMG Real Estate Advisors.
6.5 million square feet of industrial space was under construction, 74.8% of it speculative, meaning built without a signed tenant.

Industrial

Q1 2026 was the quarter Louisville industrial took a breath. Cushman & Wakefield | Commercial Kentucky's Q1 2026 Industrial MarketBeat reported overall vacancy of 4.0%, up 30 basis points from 3.7% at year-end 2025. Net absorption, the change in occupied space (move-ins minus move-outs), came in at negative 12,047 square feet. That followed a fourth quarter in which tenants absorbed 2.6 million square feet and a full-year 2025 total of 3.9 million square feet.

The softness sat in big-box (bulk) buildings. Bulk vacancy rose to 6.8% from 6.0%, bulk net absorption was negative 214,118 square feet, and bulk asking rent slipped to $6.82 per square foot from $6.89. Two speculative bulk buildings delivered 953,980 square feet during the quarter (670,320 square feet from VanTrust and 283,660 from US Capital), so vacancy rose even though leasing reached 1.4 million square feet, up from 1.3 million in Q1 2025.

Overall net asking rent still climbed to $6.73 per square foot, up from $6.55 in Q4 2025. Demand skewed small and mid-size: 18 of the quarter's 19 new leases were under 300,000 square feet. The largest was Meta's 711,975-square-foot lease at 310 Velocity Way in Bullitt County.

By submarket, the South submarket, the largest at about 61.1 million square feet, ran at 1.9% vacancy. Bullitt County sat at 5.5% with 2.4 million square feet under construction, and Southern Indiana posted the highest vacancy at 9.3% with 1.6 million square feet under construction. Of the 6.5 million square feet in the pipeline, 25.2% was build-to-suit (built for a committed tenant). For a corridor-by-corridor view, see our Louisville industrial corridors guide.

Office

Two research firms reported two different vacancy rates, and both are accurate for what they measure. CBRE's Q1 2026 Louisville Office Figures put marketwide vacancy at 22.8%, down 50 basis points, with 229,622 square feet of positive net absorption and 303,836 square feet of leasing. Cushman & Wakefield | Commercial Kentucky's Q1 2026 Office MarketBeat put overall vacancy at 18.8%, unchanged from Q4 2025, with 12,652 square feet of positive absorption. The gap comes from which buildings each firm tracks, so compare each firm only against its own prior quarters.

On rent, CBRE recorded an overall average asking rate of $19.28 per square foot. Cushman & Wakefield had $19.03, up from $18.95 in Q4 2025. Cushman & Wakefield's downtown vs. suburban split:

CBD: 22.2% vacancy (21.9% in Q4 2025), net absorption of -928 square feet, overall asking rent of $17.89, Class A asking rent of $20.15.
Suburban: 16.1% vacancy (16.4% in Q4 2025), net absorption of +13,580 square feet, overall asking rent of $20.00, Class A asking rent of $21.09.
By building class: Class A 22.5% vacant at $20.73; Class B 16.1% at $16.95; Class C 2.2% at $13.66.

Sublease space, which is space a tenant rents out to someone else (usually at a discount), fell to 154,000 square feet per CBRE, down 34% from the prior quarter and 40% below a year earlier. Two-thirds of leasing happened in suburban submarkets. Notable deals listed by Cushman & Wakefield included Haier's 53,679-square-foot renewal at 307 North Hurstbourne Parkway and TEKsystems' 8,607-square-foot renewal at 700 North Hurstbourne Parkway. Downtown, Humana Tower, the Brown & Williamson Tower and the Fiscal Court building each announced conversion plans for mixed-use or residential space. Only 19,266 square feet of office was under construction, down from 120,466 at year-end. More detail by area is in our Louisville office corridors guide.

Retail

Public Q1 2026 retail data is the thinnest of any sector. Cushman & Wakefield's Louisville retail MarketBeat is a narrative report with no published vacancy or rent table, and we could not find a publicly accessible Q1 2026 Louisville retail report from Matthews. So this edition does not print a Q1 retail vacancy rate. Here is what was published:

Marcus & Millichap's 1Q 2026 Louisville retail forecast described vacancy as still among the lowest in the nation and counted about 10 large-format leases over 20,000 square feet signed in 2025, near the past decade's average.
The same report flagged Publix's planned backfill of a former Neighborhood Walmart and Wawa's plan for six locations across the metro.
Cushman & Wakefield's Q4 2025 retail report, the last read before the quarter opened, put prime retail rents in the eastern and northeastern suburbs at $30 to $40 per square foot, with new construction testing $50.
On Jan. 28, 2026, Branch Properties presented its plan to replace Mid City Mall on Bardstown Road with a Publix-anchored center, six stand-alone retail buildings and a relocated library branch.

The next published read came a quarter later: Matthews' Q2 2026 report put Louisville retail vacancy at 3.1% and asking rent at $18.71 per square foot. Those are Q2 figures and belong to the next edition.

Commercial multifamily (apartment buildings)

MMG Real Estate Advisors' Q1 2026 report put Louisville's average effective rent, meaning what renters actually pay after concessions such as a free month, at $1,212 a month. That was up 0.9% from the prior quarter, MMG's strongest sequential gain since Q1 2025, and up 0.1% year over year. Occupancy was 92.5%, down 90 basis points from a year earlier. Over the trailing four quarters, the market absorbed 1,805 units against 2,485 completions and 2,859 starts, and the active pipeline equaled 3.6% of existing inventory.

Cushman & Wakefield | Commercial Kentucky's Q1 2026 multifamily report tracks a different property set. It counted 3,995 units delivered over the past year, 3,524 under construction and more than 14,204 planned, with the Okolona and Jeffersontown submarkets leading the future pipeline. Its submarket data showed wide spreads: Springhurst/Glenview at $1,539 average rent and 4.4% vacancy, Douglass Hills at $1,501 and 5.9%, Jeffersontown at $1,362 and 5.5%, and Central/Downtown at $1,447 and 13.6%. Across the river, Jeffersonville ran $1,230 and 5.6%, and Clarksville $1,222 and 9.3%.

Investment sales and cap rates

A capitalization rate (cap rate) is a property's net operating income (NOI) divided by its price. None of the Q1 2026 Louisville reports we could access published a quarter-specific cap rate, so we are not citing one. Reported transaction activity:

Apartments: 669 units sold in Q1 2026, and 2,111 units since Q3 2025, per Cushman & Wakefield | Commercial Kentucky. Named sales included the 210-unit Century Middletown, bought by Centennial Holding Company, and a 321-unit Southern Indiana portfolio (Ashby, Lakeview and Carrington Place). Prices were not disclosed.
Industrial: the quarter's sales list included a 1,498,654-square-foot investment sale in Bullitt County involving Olympus and Exeter.

What changed from the prior quarter (Q4 2025 to Q1 2026)

Industrial vacancy: 3.7% to 4.0%. Net absorption: +2.6 million square feet to -12,047. Net asking rent: $6.55 to $6.73. Under construction: 6.3 million to 6.5 million square feet. (Cushman & Wakefield)
Bulk industrial vacancy: 6.0% to 6.8%. Bulk asking rent: $6.89 to $6.82.
Office (Cushman & Wakefield): overall vacancy flat at 18.8%; CBD 21.9% to 22.2%; suburban 16.4% to 16.1%; asking rent $18.95 to $19.03.
Office (CBRE): vacancy down 50 basis points to 22.8%; sublease space down 34%.
Apartments (MMG): occupancy 93.1% to 92.5%; effective rent up 0.9% quarter over quarter.

One note on the apartment numbers: MMG reported $1,212 at year-end 2025 in its forecast report and $1,212 again in Q1 2026 alongside a 0.9% sequential gain, which points to a revised Q4 figure. We cite each as published.

What it meant for owners, buyers, and tenants

Industrial tenants needing 300,000 square feet or more had more choices: bulk vacancy reached 6.8% with nearly a million square feet of new speculative space delivered. Smaller users saw less relief, since demand stayed concentrated under 300,000 square feet and overall asking rent still rose. Owners of new bulk space faced longer lease-up, and Cushman & Wakefield's own outlook said inventory growth may still outpace occupancy and allow vacancy to rise through the year.

Office tenants downtown had real leverage at 22.2% CBD vacancy, while suburban Class A tenants faced asking rents above $21. Owners of older downtown towers were increasingly treating conversion as the exit.

Apartment owners saw occupancy slip as supply landed, so underwriting off in-place rents and actual concessions mattered more than asking rents. For buyers in every sector, the lack of a published Q1 cap rate meant pricing came down to the rent roll and the 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, Q3 2024, Q4 2024, Q1 2025, Q2 2025, Q3 2025, Q4 2025 and Q1 2026. Each edition is added as it's published. 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.

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 2026?

4.0%, up from 3.7% in Q4 2025, per Cushman & Wakefield | Commercial Kentucky. Bulk (big-box) vacancy was higher at 6.8%, and net absorption was -12,047 square feet, the first negative quarter in seven.

Why do CBRE and Cushman & Wakefield report different office vacancy rates?

Each firm tracks a different set of buildings. CBRE reported 22.8% and Cushman & Wakefield 18.8% for the same quarter. Compare each firm only against its own history: CBRE showed a 50-basis-point improvement, and Cushman & Wakefield showed no change overall.

What was the average apartment rent in Louisville in Q1 2026?

$1,212 a month in average effective rent, with 92.5% occupancy, per MMG Real Estate Advisors. Rent rose 0.9% from the prior quarter and 0.1% from a year earlier.

What was Louisville's retail vacancy rate in Q1 2026?

No Q1 2026 Louisville retail vacancy rate was available in the public reports we reviewed. Marcus & Millichap described vacancy as among the lowest in the nation, and Matthews put it at 3.1% one quarter later, in Q2 2026.

Is this the most recent Louisville market report?

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

Sources

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