Louisville Commercial Real Estate Market Report: Q2 2025 Data

October 3, 2026 at 4:00 AM

by Rob Bergeron

Louisville Commercial Real Estate Market Report: Q2 2025 Data

This edition covers second-quarter 2025 (April–June) 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 Q2 2025, we say so instead of filling the gap. For the most current numbers, see the Q3 2026 edition.

Market snapshot: Q2 2025

Industrial vacancy fell to 3.7% from 4.0%, with 519,922 square feet of positive net absorption and no new bulk deliveries, per Cushman & Wakefield | Commercial Kentucky.
Office vacancy jumped to 19.4% from 17.9% after tenants gave back 317,259 square feet, led by Humana vacating its Forum buildings.
Suburban office vacancy rose to 17.0% from 14.8%, while downtown (CBD) reached 22.5%.
Apartment rents averaged $1,221 a month, up 1.0% year over year, but occupancy slipped to 93.1%, which MMG Real Estate Advisors called the lowest level since early 2020.
General Electric/Haier announced it would move washing machine production from China to Louisville, eventually creating up to 800 jobs.

Industrial

Cushman & Wakefield | Commercial Kentucky's Q2 2025 Industrial MarketBeat reported overall vacancy of 3.7%, down 30 basis points from 4.0% in Q1. (A basis point is one-hundredth of a percentage point.) Net absorption, the change in occupied space (move-ins minus move-outs), was 519,922 square feet for the quarter and about 793,000 year to date.

The improvement was driven by bulk (big-box) buildings. No new bulk construction completed in Q2, so year-to-date bulk completions stayed at 926,056 square feet, and bulk buildings absorbed 407,826 square feet. Bulk vacancy fell to 5.1% from 6.2%. Bulk asking rent slipped to $6.38 per square foot from $6.49, and the overall headline net asking rent was $5.95.

Leasing totaled 1.5 million square feet in the quarter, 1.2 million of it bulk, for 2.83 million year to date. About 1.5 million square feet broke ground, bringing the amount under construction to 6.4 million square feet, and the report counted 18 buildings in the planned bulk pipeline. It also said uncertainty in debt markets and high construction costs would limit speculative construction, meaning buildings started without a signed tenant. Largest deals:

Arvato: 631,336-square-foot new lease in Bullitt County.
Resideo: 420,000-square-foot renewal in West/Southwest.
Taylored FMI: 317,900-square-foot renewal in West/Southwest.
Sazerac: 250,000-square-foot renewal in Southern Indiana.

By submarket, the East ran at 0.9% vacancy, the South at 2.6%, Bullitt County at 2.9% (down from 5.4% in Q1) with 1.22 million square feet under construction, and Southern Indiana at 6.1% with 4.24 million square feet under construction. The report also noted that Site Selection magazine ranked Louisville sixth among metros for investment per capita for a second straight year. See our Louisville industrial corridors guide for the submarket map.

Office

Q2 2025 was a hard quarter for suburban office. Cushman & Wakefield | Commercial Kentucky's Q2 2025 Office MarketBeat put overall vacancy at 19.4%, with negative net absorption of 317,259 square feet for the quarter and 532,015 year to date. Humana's exit from its Forum buildings in Hurstbourne/Eastpoint alone accounted for 148,336 square feet of negative absorption.

CBD: 22.5% vacancy, Q2 net absorption of -59,943 square feet, overall asking rent of $17.71, Class A asking rent of $19.49.
Suburban: 17.0% vacancy, Q2 net absorption of -257,316 square feet, overall asking rent of $19.99, Class A asking rent of $21.12.
By building class: Class A 23.7% vacant at $20.46; Class B 16.3% at $16.77; Class C 1.4% at $14.24.

Overall asking rent was $18.90 per square foot, essentially flat from $18.89. Leasing reached 158,974 square feet year to date. Construction fell to 30,000 square feet, all downtown. Top Q2 leases were mid-size: 11,810 square feet at 750 East Jefferson Street, 9,923 at 10350 Ormsby Park Place, 7,935 at 400 West Main Street and 7,700 at 9901 Linn Station Road.

CBRE's view of the same quarter, published in Southeast Real Estate Business, put leasing at about 235,000 square feet and negative net absorption at about 256,000, driven by large suburban relocations. CBRE said suburban Class A vacancy rose to 17.2%, while the CBD posted 6,100 square feet of positive Class A absorption, including the Jefferson County Sheriff's Office's 47,000-square-foot lease at 515 West Market Street. CBRE was tracking 16 office conversion projects totaling about 1.5 million square feet, including five downtown buildings (843,300 square feet) slated to become 570-plus apartments and three buildings (225,000 square feet) becoming 204 hotel rooms. Because CBRE and Cushman & Wakefield track different building sets, compare each firm only with its own history. More detail is in our Louisville office corridors guide.

Retail

Cushman & Wakefield's Q2 2025 Louisville retail MarketBeat is a narrative report with no vacancy or rent table, and we found no other publicly accessible Q2 2025 Louisville retail report with a measured vacancy rate. So this edition does not print a Q2 retail vacancy rate. What the report did publish:

Vacancy was described as very low in the eastern and northeastern suburbs.
Backfill rents for second-generation space in prime locations ran in excess of $30 per square foot, and new construction routinely exceeded $50.
New-to-market tenants included PGA Tour Superstore at the Springs Shopping Center and REI Co-op at Paddock Shops.
Burlington took the former Joann space at Shelbyville Road Plaza, its fourth metro location, one of the quickest backfills of the boxes left by early-2025 national closures.
Hospitality: the 130-room Tempo by Hilton on Jefferson Street in NuLu was in the works, and the $75 million, 168-room Hotel Bourre Bonne at Second and Market streets opened in May.

The report credited strong suburban performance and limited new construction for keeping retail fundamentals positive.

Commercial multifamily (apartment buildings)

MMG Real Estate Advisors' Q2 2025 report put Louisville's average rent at $1,221 a month, up 1.0% year over year. Occupancy fell to 93.1%, down 100 basis points from a year earlier and, per MMG, the lowest level since early 2020. The market absorbed 554 units in Q2, bringing first-half absorption to 738 units against 1,384 completions. MMG said demand improved from Q1 but stayed below historical norms, and that Shelby and Spencer counties and Class A properties posted stronger gains. It also said a sharp pullback in construction starts was expected to ease supply pressure.

We could not find a Cushman & Wakefield | Commercial Kentucky Louisville multifamily report for Q2 2025 (the Q2 2025 edition we found covers Lexington), so there is no Q2 submarket rent table in this edition. Its Q1 2025 and Q3 2025 reports bracket the quarter.

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 Q2 2025 Louisville reports we could access published a quarter-specific cap rate, so we are not citing one. Cushman & Wakefield | Commercial Kentucky's apartment sales count was not published separately for Q2; its reports show 320 units sold in Q1 and 1,880 sold year to date through Q3. The largest Q2 industrial deals cited above were leases and renewals, not sales.

What changed from the prior quarter (Q1 2025 to Q2 2025)

Industrial vacancy: 4.0% to 3.7%. Net absorption: 221,016 to 519,922 square feet. Headline net asking rent: $6.05 to $5.95. Under construction: about 4.8 million to 6.4 million square feet. (Cushman & Wakefield)
Bulk industrial vacancy: 6.2% (as restated in the Q2 report; first published at 7.1%) to 5.1%. Bulk asking rent: $6.49 to $6.38.
Office (Cushman & Wakefield): overall vacancy 17.9% to 19.4%; CBD 22.0% to 22.5%; suburban 14.8% to 17.0%; asking rent $18.89 to $18.90.
Office net absorption: -254,308 to -317,259 square feet.
Apartments (MMG): average rent $1,207 to $1,221; occupancy 93.6% to 93.1%; quarterly absorption 475 to 554 units.

What it meant for owners, buyers, and tenants

Industrial landlords had the stronger hand in Q2: vacancy fell, no new bulk space delivered, and three of the four largest deals were renewals, which signals tenants staying put. Bulk tenants still saw asking rents dip slightly, so there was room to negotiate on larger blocks.

Suburban office flipped toward tenants. A single large move-out pushed suburban vacancy up more than two points in one quarter, giving tenants in Hurstbourne/Eastpoint more choices. Downtown owners kept looking at conversion, with roughly 1.5 million square feet in CBRE's conversion count.

Apartment owners faced the lowest occupancy since early 2020, so underwriting off actual in-place rents and concessions mattered more than asking rents. Run the numbers 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:

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FAQ

What was Louisville's industrial vacancy rate in Q2 2025?

3.7%, down from 4.0% in Q1 2025, per Cushman & Wakefield | Commercial Kentucky. Bulk vacancy fell to 5.1%, and net absorption was 519,922 square feet.

Why did Louisville office vacancy rise in Q2 2025?

Mostly suburban move-outs. Cushman & Wakefield reported 257,316 square feet of negative suburban absorption, including 148,336 square feet from Humana vacating its Forum buildings in Hurstbourne/Eastpoint. Overall vacancy rose to 19.4%.

What was the average apartment rent in Louisville in Q2 2025?

$1,221 a month, up 1.0% year over year, with 93.1% occupancy, per MMG Real Estate Advisors.

What was Louisville's retail vacancy rate in Q2 2025?

No Q2 2025 Louisville retail vacancy rate was published in the reports we could access. Cushman & Wakefield described vacancy as very low in the eastern and northeastern suburbs, with prime backfill rents above $30 per square foot.

Is this the most recent Louisville market report?

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

Sources

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