LOUISVILLE2019 MARKET OVERVIEW
2019 MARKET OVERVIEW
• PRIME, CENTRALIZED LOCATION—within a one-day drive of two-thirds of the nation’s population
• STRONG CORPORATE BASE—numerous Fortune 500, Fortune 1000, regional, national and international corporations have headquarters or a large presence in the metro area
• GLOBAL LEADER IN AIR CARGO TRAFFIC— Louisville ranked #7 in the world by Airports Council International
• NATIONALLY RECOGNIZED BUSINESS SCHOOL—University of Louisville’s School of Business nationally recognized as one of the best business schools by U.S. News & World Report
• RICH CULTURE AND QUALITY OF LIFE—the city draws attention for being vibrant and sophisticated as well as culturally rich and hospitable. Louisville was ranked among the 20 most cultured cities by Travel & Leisure
• ECONOMIC DRIVERS—Louisville’s thriving economy is driven by five major sectors: Healthcare, Tourism, Higher Education, Manufacturing and Transportation
• GROWTH & DEVELOPMENT—Louisville is in the midst of an economic renaissance with $13B in new capital investment since 2014
2018 Population 1,304,874
2023 Population (Estimated) 1,351,952
Household Growth (2010-2018) 5.12%
Employment (Nov. 2018) 678,600
Employment Growth (2010-2018) 95,586
Unemployment Rate (Nov. 2018) 3.4%
Fortune 500 Headquarter Companies 3
LouisvilleRanked
#14 for millennial boomtowns
—Business Insider
TOP REASONS TO INVEST IN LOUISVILLE
Louisville has emerged as a “young Nashville” and represents the northern edge of the Southeast. It has developed an expanding base of increasingly diverse capital that recognizes this mid-sized city as a
growth pocket in the center of the U.S. and a diverse, riverfront city. Louisville’s recent recognition as a place of “Free-wheeling Innovation and Growth” (TIME Magazine), among the five “Surprising Places to Watch” (Site Selection
Magazine), one of “America’s Breakout Cities” (CNN Money) and a top 20 City with Economic Momentum” (Newgeography.com), are also helping to attract new jobs and unprecedented investor attention. Louisville is home to 13 Fortune 500 companies,
three of which are headquartered in the city. The metro is a nationally recognized regional distribution and warehousing hub serving major operations including Amazon, UPS, Ford Motor Company and General Electric. As a complement to Louisville’s economic expansion, the leading
healthcare companies, Humana and Kindred Healthcare—both of which are Fortune 500 companies headquartered in Louisville— hire a steady stream of information technology and healthcare professionals in high paying jobs.
LOUISVILLE: THE STAR OF THE SOUTHEAST
LOUISVILLE MSA “AT A GLANCE”
Source: Bureau of Labor Statistics; Environmental Systems Research Institute (ESRI)
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LOUISVILLE MSA TOP EMPLOYERSCOMPANY NAME # EMPLOYEES
UPS 21,233
JEFFERSON COUNTY PUBLIC SCHOOLS 14,476
FORD MOTOR COMPANY 12,600
NORTON HEALTHCARE 12,247
HUMANA, INC. 12,000
UNIVERSITY OF LOUISVILLE 6,933
LOUISVILLE METRO GOVERNMENT 7,000
BAPTIST HEALTHCARE 6,159
GE APPLIANCES 6,000
KROGER 3,079
SPECTRUM 2,400
MANNA, INC. 2,300
ARCHDIOCESE OF LOUISVILLE 2,252
RESCARE, INC. 1,948
A HAVEN FOR NOTABLE EMPLOYERS
LOUISVILLE IS HEADQUARTERS FORTHREE FORTUNE 500 COMPANIES
LOUISVILLE’S MAJOR CORPORATE HQCOMPANY NAME # EMPLOYEES
Humana | Fortune 100 12,000
GE Appliances 6,000
Manna, Inc. 2,300
Papa Johns 1,626
Kindred Healthcare | Fortune 500 1,571
Churchill Downs 1,515
Samtec Inc. 1,500
Texas Roadhouse 1,500
Rawlings Group 1,440
Brown-Forman Corp 1,300
Signature HealthCARE 900
Yum! Brands Inc. | Fortune 100 875
Republic Bank & Trust 849
Thornton's Inc. 774
Source: Business First, December 2018
Louisville ranked #1 City for
Manufacturing—Forbes
Source: Bureau of Labor Statistics; Environmental Systems Research Institute (ESRI)
2019 MARKET OVERVIEW
Jobs Created from Nov. 2010 to Nov. 2018 Average Home Value White Collar Employment
$220,801 59.2%
*In 2015 the U.S. Census Bureau changed “MSA” boundaries to “CBSA” boundaries.
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eLOUISVILLE MSA ECONOMIC STATISTICS
Louisville ranked #8 Best City for
New College Grads—Smart Asset
EMPLOYMENT GROWTH* HOUSEHOLD
POPULATION GROWTH*MEDIAN HOUSEHOLD INCOME*
73,066
Sources: U.S. Census Bureau, American Community Surveys; Bureau of Labor Statistics
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
570,000
580,000
590,000
600,000
610,000
620,000
630,000
640,000
650,000
2011 2012 2013 2014 2015 2016 2017
Employment Growth
Employed Unemployment Rate485,000
490,000
495,000
500,000
505,000
510,000
515,000
2011 2012 2013 2014 2015 2016 2017
Household Growth
Empl
oyee
s
$45,000
$46,000$47,000$48,000
$49,000$50,000$51,000$52,000
$53,000$54,000$55,000
$56,000
2011 2012 2013 2014 2015 2016 2017
Median Household Income
1,240,000
1,250,000
1,260,000
1,270,000
1,280,000
1,290,000
1,300,000
1,310,000
2011 2012 2013 2014 2015 2016 2017
Total Population
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LOUISVILLE MSA MULTIFAMILY STATISTICS
TOTAL MARKET RENT AND OCCUPANCY
A-GRADE CAP RATES
TOP-20 RENT AND OCCUPANCY
4.38%4.81% 4.79%
6.31%
3.10%2.66%
1.84%2.49% 2.54%
2.16%1.58%
2.27%2.84%
92110 132
342 427480 393 357
381440
359 257
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
20052006
2007
2008-20092010
20112012
20132014
20152016
2017
2018 YTD
Cap
Rate
/10-
year
UST
10-Year UST Risk Premium
Louisville ranked 7th among the “
Top 15 Cities” for affordable living
—Forbes
$1,020$1,043
$1,116
$1,161$1,143 $1,148 $1,137 $1,144
86%
88%
90%
92%
94%
96%
98%
100%
$900
$950
$1,000
$1,050
$1,100
$1,150
$1,200
Q1 15 Q3 15 Q1 16 Q3 16 Q1 17 Q3 17 Q1 18 Q3 18
Avg. Quoted Rent Occupancy Rate
7.28%
6.66% 6.75%
5.81%5.69%
5.35%5.61%
4.64%
3%
4%
5%
6%
7%
8%
2011 2012 2013 2014 2015 2016 2017 2018
Cap
Rate
Cap
Rate
$625$639 $641
$656$669
$699
$734$760
$791
$826
$858 $867
86%
88%
90%
92%
94%
96%
98%
100%
$600
$650
$700
$750
$800
$850
$900
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Q3 2018
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INVESTMENTS DRIVE DEVELOPMENT
COMPUTERSHARE—a global leader in transfer agency, employee equity plans, mortgage servicing and more with more than 600 employees in the CBD. The company has filed plans to hire an additional 500 in coming years.
HUMANA—approximately 12,000 employees in Louisville with the vast majority located in the CBD.
KINDRED HEALTH—a Fortune 500 company with over 1,500 employees headquarted in Louisville.
LOUISVILLE INTERNATIONAL AIRPORT—is home to the largest fully
“#1 City for Manufacturing Job Growth”—Forbes,
2017
THE CBD IS ANCHORED BY
MAJOR DEVELOPMENTS (Partial List)NAME STATUS PRICE
Old Brownsboro Crossings MOB Under Construction $20M
Paristown Point Arts District Proposed $28M
Louisville FC Stadium Under Construction $65M
Kindred Healthcare HQ Expansion Complete $39.5M
Parklands of Floyds Fork Complete $120M
UPS Worldport Centennial Hub Complete $300M
Nucleus Building I Complete $425M
The Novak Center for Children’s Complete $475M
Convention Center Expansion Complete $720M
Omni Multi-Use Development Complete $754M
KFC Yum! Center Complete $1.38B
Ohio River Bridges Project Complete $2.6B
Louisville, the state’s largest metropolitan area, is a vibrant riverfront city with a rapidly growing population, diversification of employment and attractive multifamily supply/demand balance. Louisville is home to 13 Fortune 500 companies, three of which are headquartered in the city. The metro is a nationally recognized regional distribution and warehousing hub serving major operations including Amazon, UPS, Ford Motor Company and General Electric, among many others. With a highly successful series of major distribution facilities now open and future capital investments in distribution parks planned, Louisville continues to be the focus of institutional investment. Leading this remarkable transformation from a city known mostly for horse racing, to a logistics giant is the development and expansion of UPS Worldport, the corporation’s main global air hub for its distribution business across the US. The series of substantial improvements has steadily boosted UPS employment in the Louisville metro. The additional logistics jobs created over the past five years have had a multiplier effect in several areas including retail and office support positions.
With 20 employers in the healthcare sector, Louisville is at the forefront of the nation’s healthcare trends. Nationally-recognized Fortune 500 companies, Humana and Kindred Healthcare, are headquartered in Louisville and hire a steady stream of information technology and healthcare professionals in high-paying positions. Yum! Brands (Fortune 500), one of the world’s largest restaurant holding companies, is also headquartered in Louisville. These employers’ presence in the Louisville metro brings stable demand for apartment housing and is an immeasurable economic driver for the success of the multifamily market. Building upon the city’s healthcare, research and life sciences industry, the University of Louisville Foundation initiated a project to foster economic development and innovation for Louisville’s downtown community, called Nucleus Innovation Park, a nine-acre urban life science research park located along the eastern edge of downtown Louisville.
Louisville is in the midst of an economic renaissance with $13B in new capital investment since 2014. Louisville Forward, the city’s organization for economic development, focuses on making Louisville a premier destination through business attraction, retention and expansion.
automated package handling facility in the world, turning over an average of 130 aircrafts and processing an average of 1.6M.
THE UNIVERSITY OF LOUISVILLE—Nearly 21,000 students and 7,000+ employees.
BROWN FORMAN— headquartered in Louisville with 1,300 employees
2019 MARKET OVERVIEW
THE MSA BAR CONTINUES TO RISELouisville among “top cities where millennials are
moving” —SmartAsset
NEW CBD DEVELOPMENTS ARE RAISING THE BAR
THE RESIDENCES AT OMNI, a 30-story, mixed-use, 226-unit, residential building, towers over the city of Louisville. A first-of-its-kind in the CBD, The Residences at Omni has raised the bar on luxury and convenience shattering Louisville metro’s prior rent ceiling. Units feature floor-to-ceiling glass with panoramic city views, LVT flooring, stainless steel appliances and granite countertops. Residents enjoy a 24-hour state-of-the-art fitness center, resort-style pool, pet spa, controlled access parking garage and direct access to an on-site market and plaza level retail.
Total Number of Multifamily Units
Average Occupancy
95%52,354Average
Square Feet
939Average
Rent
$863Average Rent PSF
$0.92
Multifamily demand in Louisville is at an all-time high, driving new housing and mixed-use developments that are attracting highly educated, highly compensated residents and adding to the MSA’s growth and vibrancy.
Strong demand in the CBD, fueled largely by “suburban to urban“ preferences, continues to drive low vacancy rates and all-time high rental rates (see Residences at the Omni to right). Properties delivered to the market in the last 12 months have achieved an average asking rate of $1,414 per unit, $1.48 PSF, which is 60% above average rents at existing properties. Today’s levels of new multifamily supply are challenged to satisfy the growing demand to live in the Louisville MSA.
Louisville, with a growing metro population of over 1.3M, has emerged as a shining star in the northern edge of the Southeast. A dazzling array of national accolades crown this city on the move. The city has become widely recognized for its diverse business and corporate base, highly educated workforce, world-class sports, cultural attractions, shopping and premier dining and entertainment options.
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SELECT INSTITUTIONAL EQUITY SOURCES
ACRE Real Estate
Almanac/Mount Auburn
American Campus Communities
Argosy
Blackstone
Continental Realty Advisors
Eagle Realty
Goldman
Harrison Street
Independence Realty Trust
Inland
MAA REIT
PAC
Pride Rock
Public REIT
Sentinel
The John Buck Company
Varia US Properties
Average Rent PSF
Louisville named“top 15 city for
affordable living”—Forbes
2019 MARKET OVERVIEW
WORLD-CLASS EVENTS DRIVE VISITORS & SPENDING:
• KENTUCKY DERBY• KENTUCKY OAKS• PGA CHAMPIONSHIP• LOUISVILLE FC• CHAMPIONSHIP BOXING• FORECASTLE FESTIVAL• IRONMAN TRIATHLON• MID-AMERICA TRUCKING SHOW• NCAA CHAMPIONSHIPS• NSRA STREET ROD NATIONALS• RED BULL FLUGTAG• RED BULL GLOBAL RALLYCROSS• ST. JAMES COURT ART SHOW• THUNDER OVER LOUISVILLE• VEX ROBOTICS WORLD CHAMPIONSHIP
“For the first time,we will benefit from all
the revenue streams associated with professional
soccer, which means sustainability for our business
model long into the future”—Brad Estes,
LouCity President
WORLD-CLASS SPORTING AND EVENTS
Sports is a catalyst for development and positive change throughout the region. Louisville has rich history of hosting professional and amateur sporting events, most notably the Kentucky Derby, often referred to as “the most exciting two minutes in sports”.
Louisville Parks:12,000 Acres
120 Parks70 Miles
of Hiking Trails60 Miles
of Paved Paths
LOUISVILLE FC SOCCER STADIUM
Set to open in 2020, Lou City’s $65M, 11,300-seat world-class stadium is currently under construction in Louisville’s 35-acre Butchertown Development District.
1 1
CULTURE DRIVES TOURISM
THE MARKET
LOUISVILLE RANKED 3RD ON THE LIST OF “MID-SIZED
CITIES WITH THE MOST ENERGY STAR BUILDINGS —Environmental Protection
Agency, 2018
LOUISVILLE RANKED 10TH ON THE LIST OF THE
“25 BEST CITIES FOR JOBS” —Glassdoor, 2017
#1 “BEST DESTINATIONEXPERIENCE
—World Food Travel Association, 2017
LOUISVILLE RANKED A “TOP CITY FOR WOMEN
IN TECHNOLOGY“ —SmartAsset, 2018
LOUISVILLE RANKED #1 ON THE LIST OF THE
“BEST PLACES TO TRAVEL” —Travel & Leisure, 2017
LOUISVILLE NAMED A “GOOGLE FIBER CITY”
—Google, 2017
LOUISVILLE RANKED 9TH “BEST CITY FOR JOB SEEKERS
—ZipRecruiter 2017
LOUISVILLE NAMED #1 “CITY FOR
MANUFACTURING JOB GROWTH” —Forbes, 2017
LOUISVILLE NAMED A TOP 15 CITY FOR
AFFORDABLE LIVING” —Forbes, 2018
LOUISVILLE NAMED TO LIST OF “TOP CITIES WITH THE HAPPIEST WORKERS”
—CNBC, 2019
LOUISVILLE LISTED AMONG THE WORLDS “TOP 1O BEER DESTINATIONS”
—VinePair, 2018
LOUISVILLE NAMED THE “#1 BEST FOOD CITY
IN THE WORLD” —National Geographic, 2017
©2019 CBRE, Inc. This information has been obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the market.
CBRE and the CBRE logo are service marks of CBRE, Inc. and/or its affiliated or related companies in the United States and other countries. All other marks and photos displayed on this document are the property of their respective owners.
Sources: Business Insider, CBRE, Inc., Chief Executive, Downtown Indy, Inc., Environmental Systems Research Institute (ESRI), Fast Reports, Food & Wine, Forbes, Indianapolis Business Journal (IBJ), Indy Chamber of Commerce, Kiplinger, Money Magazine, Niche.com, Nielsen, Patch.com, Software.org, Time Magazine, Travel & Leisure, U.S. Bureau of Labor Statistics, U.S. Census Bureau, U.S. News & World Report.
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