Louisville Commercial Real Estate Market Report: Q3 2025 Data

October 3, 2026 at 4:00 AM

by Rob Bergeron

Louisville Commercial Real Estate Market Report: Q3 2025 Data

This edition covers third-quarter 2025 (July–September) 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 Q3 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: Q3 2025

Industrial vacancy ticked up to 3.9% from 3.7%, and the construction pipeline grew to 8.3 million square feet after seven buildings totaling 2.3 million square feet broke ground, per Cushman & Wakefield | Commercial Kentucky.
Industrial net asking rent rose to $6.25 per square foot, and bulk asking rent climbed to $6.56 from $6.38.
Office vacancy eased to 19.2% from 19.4%, and the U.S. Army Corps of Engineers signed a 200,777-square-foot downtown lease at 118 East Main Street.
Apartment sales picked up: 1,079 units sold in Q3, bringing the year-to-date total to 1,880, per Cushman & Wakefield | Commercial Kentucky.
Ford leased 567,433 square feet at 370 Logistics Avenue in Southern Indiana, the quarter's largest industrial lease.

Industrial

Cushman & Wakefield | Commercial Kentucky's Q3 2025 Industrial MarketBeat reported overall vacancy of 3.9%, up 20 basis points from 3.7% in Q2. (A basis point is one-hundredth of a percentage point.) Year-to-date net absorption, the change in occupied space, reached about 847,000 square feet. Leasing held steady at 1.4 million square feet, the third straight quarter of consistent new leasing, for 4.1 million year to date. Overall net asking rent rose to $6.25 per square foot from $5.95 in Q2.

Bulk (big-box) buildings softened. Bulk vacancy rose to 6.4% from 5.1%, and bulk net absorption was negative 165,819 square feet for the quarter (positive 477,659 year to date). Bulk asking rent still climbed to $6.56 from $6.38. Completions totaled 448,293 square feet in Q3: 211,969 square feet speculative (built without a signed tenant) and 236,234 build-to-suit (built for a committed tenant). Year-to-date completions reached about 1.4 million square feet.

The bigger story was the pipeline. Seven buildings totaling 2.3 million square feet broke ground in Q3, lifting the total under construction to 8.3 million square feet. Notable deals:

Ford: 567,433-square-foot new lease at 370 Logistics Avenue, Southern Indiana.
Arvato: a 396,000-square-foot sale at 8201 Minor Lane in the South submarket, which the report classified as an owner sale.
AI International: 175,000-square-foot new lease at 6701 Enterprise Drive, South.
Hoffman Property Holding: 114,200-square-foot sublease at 600 Patrol Road, Southern Indiana.

By submarket, the East held 1.1% vacancy, the South 3.6% (with 404,546 square feet of negative absorption year to date), Bullitt County 3.6% with 1.95 million square feet under construction, Southern Indiana 5.6% with 3.79 million under construction, and the Airport submarket 5.8%. The report expected bulk vacancy to trend slightly higher in coming quarters, strong leasing to continue into Q4, and bulk inventory to reach 100 million square feet by mid-2027. Those were forecasts, not results. See our Louisville industrial corridors guide for the submarket map.

Office

Cushman & Wakefield | Commercial Kentucky's Q3 2025 Office MarketBeat put overall vacancy at 19.2%, down from 19.4% in Q2, with year-to-date net absorption of about -553,000 square feet. Q3 itself was close to flat: -2,929 square feet downtown and -17,366 in the suburbs. Overall asking rent was $18.92 per square foot.

Central business district (CBD): 22.4% vacancy, overall asking rent of $17.97, Class A $19.53, Class B $15.92. Q3 leasing reached 254,885 square feet. 30,000 square feet under construction.
Suburban: 16.7% vacancy, overall asking rent of $20.03, Class A $21.25. Q3 leasing was 49,405 square feet. 101,200 square feet under construction.
By building class: Class A 23.1% vacant at $20.55; Class B 16.5% at $16.76; Class C 1.4% at $14.24.

Downtown leasing was dominated by one deal: the U.S. Army Corps of Engineers' 200,777-square-foot lease at 118 East Main Street. Other notable leases were VSimple's 21,171 square feet at 2305 River Road (Northeast) and Fultz Maddox Dickens' 17,044 square feet at 101 South Fifth Street. The report expected CBD vacancy to improve as older towers are taken out of office use, and said a shortage of suburban Class A space was letting landlords push rents. More detail is in our Louisville office corridors guide.

Retail

We could not access a Q3 2025 Louisville retail report. Cushman & Wakefield's Q3 2025 Louisville retail MarketBeat was not publicly retrievable when we compiled this archive, and that report series is narrative, with no vacancy or rent table, even when available. We found no other public Q3 2025 Louisville retail report with a measured vacancy rate. So this edition does not print a Q3 retail vacancy rate or asking rent.

The quarters on either side give the range. Cushman & Wakefield's Q2 2025 report put prime second-generation backfill rents above $30 per square foot and new construction routinely above $50, and described vacancy as very low in the eastern and northeastern suburbs. Its Q4 2025 report put prime rents at $30 to $40 per square foot, with new construction testing $50, and listed a wave of grocery and restaurant openings, covered in the Q4 2025 edition.

Commercial multifamily (apartment buildings)

Cushman & Wakefield | Commercial Kentucky's Q3 2025 multifamily report counted 2,789 units completed over the prior 12 months and 2,835 under construction, down from 3,117 under construction in its Q1 2025 report. The planned pipeline grew to more than 15,320 units, with the largest concentration in Okolona (2,844 planned). Construction underway was concentrated in Okolona (916 units) and Jeffersonville, Indiana (504 units). Submarket rents and vacancy:

Springhurst: $1,569 average rent, 3.9% vacancy. Douglass Hills: $1,513 and 5.1%.
Jeffersontown: $1,339 and 5.5%. Okolona/Hillview: $1,264 and 4.3%.
Central/Downtown: $1,472 and 13.6%, up from 10.3% in Q1. Shively: $1,231 and 13.9%.
Southern Indiana: Jeffersonville $1,237 and 6.3%; Clarksville $1,191 and 9.8%; New Albany $1,121 and 6.5%.

MMG Real Estate Advisors published a Q3 2025 Louisville report, but its page was not accessible when we compiled this archive, so this edition does not print MMG's Q3 average rent or occupancy. MMG's Q2 figures ($1,221, 93.1% occupancy) and year-end figures ($1,212, 93.1%) 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. Cushman & Wakefield's Q3 multifamily report shows cap rates only as an unlabeled chart, and no other Q3 2025 Louisville report we accessed stated one, so we are not citing a cap rate. The report did note the 10-year Treasury yield ended September around 4.22%. Reported transactions:

Apartments: 1,079 units sold in Q3, for 1,880 year to date.
La Fontenay (248 units, Class B, Douglass Hills) sold to a confidential buyer for $131,000 per unit.
The Heritage by Fairlawn (163 units, Class B, East) sold to Fairlawn for $155,000 per unit.
Industrial: the 396,000-square-foot owner sale at 8201 Minor Lane involving Arvato.

The report expected a slow sales environment for properties needing new debt, while properties with assumable debt (a loan a buyer can take over) would draw strong buyer demand.

What changed from the prior quarter (Q2 2025 to Q3 2025)

Industrial vacancy: 3.7% to 3.9%. Net asking rent: $5.95 to $6.25. Under construction: 6.4 million to 8.3 million square feet. Year-to-date absorption: about 793,000 to 847,000 square feet. (Cushman & Wakefield)
Bulk industrial vacancy: 5.1% to 6.4%. Bulk asking rent: $6.38 to $6.56. Bulk net absorption: +407,826 to -165,819 square feet.
Office (Cushman & Wakefield): overall vacancy 19.4% to 19.2%; CBD 22.5% to 22.4%; suburban 17.0% to 16.7%; asking rent $18.90 to $18.92.
Apartment pipeline (Cushman & Wakefield, Q1 to Q3 report): under construction 3,117 to 2,835 units; planned 4,044-plus to 15,320-plus units.
Apartment rents and occupancy (MMG): not available for Q3 in the sources we could access.

What it meant for owners, buyers, and tenants

Big-box industrial tilted toward tenants. Bulk vacancy rose more than a point and 8.3 million square feet was in the pipeline, so tenants needing large blocks gained choices, even as asking rents kept rising. Small and mid-size tenants in the East and South still faced vacancy under 4%.

Office stabilized after two weak quarters, and the Army Corps lease showed large users would still commit downtown. Suburban Class A tenants faced firm rents above $21.

Apartment investors finally had fresh comparable sales, with Class B communities trading between $131,000 and $155,000 per unit. With no published Q3 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 Q3 2025?

3.9%, up from 3.7% in Q2 2025, per Cushman & Wakefield | Commercial Kentucky. Bulk vacancy rose to 6.4%, and 8.3 million square feet was under construction.

What was Louisville's office vacancy rate in Q3 2025?

19.2% overall per Cushman & Wakefield | Commercial Kentucky, with 22.4% downtown and 16.7% in the suburbs. Overall asking rent was $18.92 per square foot.

How many apartment units sold in Louisville in Q3 2025?

1,079 units, bringing the 2025 total to 1,880 through September, per Cushman & Wakefield | Commercial Kentucky. Named Class B sales ranged from $131,000 to $155,000 per unit.

What was Louisville's retail vacancy rate in Q3 2025?

No Q3 2025 Louisville retail vacancy rate was available in the public reports we could access. Cushman & Wakefield's Q2 and Q4 2025 reports described low suburban vacancy and prime rents of $30 to $40 per square foot.

Is this the most recent Louisville market report?

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

Sources

Let's talk

We would love to hear from you!

Get in touch