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  • Writer's pictureRaphael Collazo

A Comprehensive Guide to Louisville Commercial Real Estate - 10 Most Frequently Asked Questions

Louisville, Kentucky is a thriving city with a growing commercial real estate market. Whether you're a business owner looking for a new location or an investor seeking opportunities, understanding the ins and outs of the Louisville commercial real estate market is essential. In this comprehensive guide, we will answer the top 10 most frequently asked questions about Louisville commercial real estate, providing you with valuable insights and information.

Table of Contents:

What is the current state of the Louisville commercial real estate market?

The current state of the Louisville commercial real estate market is quite dynamic, with various sectors showing different trends:

  • Industrial Market: This sector has been thriving, with positive net absorption for 28 consecutive quarters. The total industrial inventory is substantial, and the vacancy rate is very low, indicating a strong demand for industrial spaces. There's also significant new construction underway, which suggests continued growth and investment in this sector.

  • Office Market: The Central Business District is a key area in the Louisville office market. There has been a notable amount of new office leases, although the vacancy rate remains high with the Class A CBD and Class A Suburban Office vacancy being 25.4% and 11.9% respectively (Q4 2023). This might indicate opportunities for tenants, as landlords are motivated to fill spaces. New office constructions are also in progress, particularly on the east side of town, which reflects ongoing interest in this market segment.

  • Retail Market: The retail sector is stable, especially with grocery-anchored retail spaces. Louisville also boasts a strong and vibrant culinary scene with many new and diverse restaurant concepts having opened in recent years. New constructions are underway across the city, and the vacancy rate remains relatively low. This stability is likely driven by local and out-of-state investments in the retail sector.

  • Multifamily Market: The multifamily sector is experiencing a growing demand, likely due to a strengthening economy and decreasing unemployment rates. The rent growth has been significant, and the vacancy rate is moderate. This sector is an attractive market for renters and investors alike.

Overall, With a strong economy and a favorable business climate, Louisville offers attractive opportunities for businesses and investors alike. The Louisville commercial real estate market demonstrates a blend of stability and growth across different sectors, with particular strength in the industrial and retail segments. The market also offers opportunities for investors and tenants in the office and multifamily sectors.

What are the popular commercial real estate locations in Louisville?

What are the popular commercial real estate locations in Louisville?

The popular commercial real estate locations in Louisville are quite diverse, catering to different needs across various sectors:

  • Industrial Market: Bullitt County and the East and Southwest submarkets are experiencing robust activity in the industrial sector. The largest industrial submarkets in the metro include Bluegrass Industrial Park, Airport, Riverport, RiverRidge, etc.

  • Office Market: The Central Business District stands out as a significant area in the office market. Other notable office submarkets include Hurstbourne/Eastpoint and Plainview/Middletown. These areas are seeing new construction and leasing activity, indicating the resilient demand for tenants wanting to locate their businesses on the east end.

  • Retail Market: There is active development in the retail sector, with notable areas for grocery-anchored retail spaces. New suburban locations are being developed by major grocery chains like Publix Super Markets and Hy-Vee, in an attempt to compete with Kroger's dominant market share.

  • Multifamily Market: The multifamily sector is also thriving in Louisville, with a growing demand for Class A apartment properties. This sector is benefiting from the city's overall economic growth and affordability, making it an attractive market for renters and investors.

Specific examples of commercial spaces available for lease or sale in Louisville include properties on South 4th Street in the Louisville Central Business District, Bardstown Rd in Fern Creek, Taylorsville Rd. and Hurstbourne Pkwy in Jeffersontown, Preston Highway, and Dixie Highway in Shively. The East End is also a sought-after area, known for its upscale retail centers and corporate headquarters. Other notable locations include the Highlands, NuLu, and the Logan Street & Shelby Street corridor.

As you can see, Louisville's commercial real estate market offers a wide range of options across various locations and property types, catering to diverse business needs and investment preferences. Whether it's industrial, office, retail, or multifamily properties, the city has several popular areas that are experiencing growth and development.

How can I find available commercial real estate properties in Louisville?

Finding available commercial real estate properties in Louisville can be done through a variety of online platforms and local resources:

  • Online Real Estate Marketplaces: The primary website local Louisville brokers use to advertise commercial properties for sale and/or lease is Websites like Crexi ( and CommercialSearch ( also offer extensive listings of commercial properties available for lease or sale in Louisville. These platforms allow you to search for properties based on specific criteria like location, property type, price, and square footage. They also provide detailed information about each listing, including photos, property details, and contact information for the listing agents.

  • Local Real Estate Brokers: Engaging with local real estate brokers who specialize in commercial properties can be very beneficial. These professionals have in-depth knowledge of the local market and can assist in finding properties that match your specific needs. They can also provide insights into market trends and help with negotiations. If you're looking for a commercial broker to help you with your search in Louisville, I'd be happy to help! Give me a call today at 502-536-7315 or email me at

  • Networking and Local Contacts: Utilizing your business network can also be helpful. Connections with other business owners, local chamber of commerce members, or participation in local business events can lead to information about available properties or upcoming opportunities.

  • Local Newspapers and Real Estate Publications: Local newspapers and specialized real estate publications often have listings of available commercial properties. These can be a good source for finding new listings and understanding the local market dynamics.

  • Online Classifieds and Forums: Websites like Craigslist or local online forums may have listings for commercial properties. However, it's important to exercise due diligence when using these platforms, as they may not always provide comprehensive or reliable information.

When searching for commercial real estate, it's important to have a clear understanding of your business needs, including the type of property, desired location, budget, and any specific requirements you may have. This will help in narrowing down the options and finding the most suitable property for your business.

What are the average rental rates for commercial properties in Louisville?

As of 2024, the average rental rates for commercial properties in Louisville vary depending on the class and property type. For office spaces, the rates are as follows:

  • Class A & A+ Office Space: Around $20.70 per square foot.

  • Class B Office Space: Approximately $18.36 per square foot.

These figures can vary based on the specific submarkets within Louisville. For instance, office spaces in the Northeast part of the city have higher asking rents compared to other areas.

In addition to office spaces, rental rates for other types of commercial properties such as retail and industrial spaces also differ. It's important to note that these rates can fluctuate based on various factors, including location, property size, amenities, and market demand.

If you're looking to lease commercial real estate in Louisville, it would be beneficial to research specific properties or consult with local real estate experts to get accurate and up-to-date information tailored to your needs. Websites like,, and are useful resources for exploring available properties and their respective rental rates.

What are the key factors to consider when leasing a commercial property in Louisville?

Commercial Properties for Lease in Louisville

When leasing commercial property in Louisville, there are several key factors to consider:

  • Location and Accessibility: The location of the property is a critical factor to consider. It should also be accessible to your target customers, employees, and suppliers. Additionally, analyze its proximity to major roads, public transportation, and amenities like restaurants, banks, and other businesses.

  • Property Type and Condition: The type of property you need depends on your business. Retail businesses may need to be located in high foot traffic areas, while office spaces might prioritize a quiet, professional environment. Assess the condition of the property, including any necessary repairs or upgrades.

  • Lease Terms and Costs: Understand all the costs involved, including rent, utilities, property taxes, maintenance, and any other fees. The length of the lease and renewal options are also important. Negotiating favorable terms can significantly impact your business’s bottom line.

  • Zoning and Compliance: Ensure the property is zoned for your type of business. Compliance with local, state, and federal regulations, including the Americans with Disabilities Act (ADA), is also important.

  • Parking and Amenities: Adequate parking for customers and employees is important. Other amenities, such as security, elevators, and HVAC systems, should also be considered based on your business needs.

  • Market Conditions: Research the local real estate market to understand trends and average rental rates. This can help you negotiate a fair price and avoid overpaying.

  • Future Growth: Consider your business’s growth potential. The property should be able to accommodate any anticipated expansion. Flexibility in the lease to move or expand within the building or area can be beneficial.

  • Professional Advice: Consult with real estate agents, lawyers, and financial advisors who understand the local market. They can provide valuable insights and help you navigate the leasing process.

  • Neighborhood and Community: The surrounding neighborhood's demographics, economic status, and future development plans can impact your business. A thriving community or one with growth potential can be beneficial.

  • Visibility and Brand Image: The property should align with your brand image and be visible to your target market. A location that enhances your brand’s visibility and reputation is ideal.

Each business will weigh these factors differently based on its unique needs and goals. Thorough research and careful consideration will help you find a commercial property in Louisville that aligns with your business goals.

What are the current trends in the Louisville commercial real estate market?

As of 2024, the Louisville commercial real estate market is influenced by several trends:

  • Interest Rates: There's a general expectation that the period of interest rate hikes might be winding down. This follows a series of increases since March 2022, with the Federal Reserve's recent decision to continue keeping rates steady at 5.5%. This stabilization of interest rates, coupled with signs of slowing inflation and cooling job and wage growth, suggests a potentially more favorable environment for commercial real estate transactions in the near future.

  • Underwriting Requirements: The industry is anticipating a slight loosening of underwriting requirements. This change is expected as the economic uncertainty fades and as lenders become more open to financing opportunities. However, banks are likely to maintain a cautious approach to mitigate risks.

  • Affordable Housing: There's a growing focus on affordable housing in the commercial real estate sector. Governments at various levels are prioritizing this area, and creative conversion options like transforming office spaces into mixed-use or hospitality spaces into multifamily units are becoming more popular.

  • AI and Technological Advancements: Artificial intelligence and new technologies are increasingly impacting the commercial real estate industry. These advancements are expected to enhance productivity and streamline operations, playing a significant role in how commercial real estate businesses operate.

  • Retail Transformation: The retail sector is undergoing transformation, moving beyond the challenges posed by e-commerce and the pandemic. There's an increasing emphasis on creating meaningful retail experiences, with concepts like flagship brand stores and experiential shopping gaining traction.

  • Construction and Supply: Construction activity picked up in 2023 following earlier slowdowns. However, there's an expectation that construction deliveries, particularly in the Class A segment, might slow down in 2024. This could lead to changes in demand dynamics across different property types.

  • Rising Insurance Costs: Increased insurance costs, particularly in coastal markets, are becoming a significant factor for investors and property owners. This trend is driven by the increasing frequency and severity of disasters, which is impacting insurance premiums and necessitating more robust infrastructure and weather-proofing measures.

These trends indicate a commercial real estate market that is adjusting to post-pandemic realities, economic shifts, and technological advancements. Investors and stakeholders in the Louisville commercial real estate market should consider these factors when making decisions in 2024.

What incentives are available for businesses and investors in the Louisville commercial real estate market?

In Louisville, the Metro Cabinet of Economic Development is offering incentives to attract businesses to the central business district. This includes a $3 million Downtown Revitalization Fund approved by the Metro Council. Incentives include building renovation funds of up to $30 per square foot for businesses leasing 5,000 square feet or more for at least five years. Additionally, there are reduced parking rates offered by the Parking Authority of River City for new businesses leasing a minimum of 20,000 square feet. These initiatives are part of efforts to increase office occupancy in downtown Louisville, where vacancy rates have risen. The city is also considering the conversion of office buildings into housing units to address these high vacancy rates.

What are the steps involved in buying a commercial property in Louisville?

Buying commercial property in Louisville involves several steps. Here's a brief overview:

  • Assessment of Needs: Determine your business needs and investment goals. This includes identifying the type of property, location, size, and budget.

  • Market Research: Preform research to understand the local commercial real estate market, including current trends and prices.

  • Financial Planning: Arrange financing. This might involve securing a commercial mortgage or other funding sources.

  • Property Search: Search for properties that meet your criteria. This can be done through real estate listings, brokers, or networking.

  • Due Diligence: Once a potential property is identified, conduct due diligence. This includes inspecting the property, verifying zoning and compliance, and evaluating its investment potential.

  • Making an Offer: If the property meets your criteria, make an offer through your agent or broker.

  • Negotiation and Contract: Negotiate the terms and price. Once agreed upon, a purchase contract is signed.

  • Closing: Complete the legal and financial processes to transfer ownership.

  • Post-Purchase: This may involve property renovations, obtaining necessary permits, or property management setup.

It's advisable to work with a real estate attorney and a commercial real estate broker to navigate these steps effectively. If you're looking to buy commercial space in Louisville, I'd be happy to help you with your search! Give me a call today at 502-536-7315 or email me at

How can I finance a commercial real estate investment in Louisville?

How can I finance a commercial real estate investment in Louisville?

Financing a commercial real estate investment in Louisville can be approached in various ways:

  • Traditional Commercial Mortgages: These are offered by banks and similar lending institutions. They typically require a down payment and have terms ranging from 5 to 20 years.

  • SBA Loans: Small Business Administration loans, like the SBA 7(a) or 504 loan programs, are designed for small business owners and can be used for commercial real estate purchases.

  • Private Lenders and Hard Money Loans: These are usually short-term loans with higher interest rates, suitable for investors planning to quickly renovate and sell or refinance the property.

  • Real Estate Investment Trusts (REITs): Investing in a REIT allows you to invest in commercial real estate without owning the property directly.

  • Crowdfunding and Syndications: These methods pool funds from multiple investors to finance a property purchase.

  • Seller Financing: In some cases, the seller may agree to finance the purchase.

  • Equity and Mezzanine Financing: These are more complex financial structures, often used for larger deals.

It's important to consult with a financial advisor, mortgage broker and/or a commercial real estate expert to explore the best financing option for your specific situation and goals.

What are the future prospects for the Louisville commercial real estate market?

The future prospects for the Louisville commercial real estate market are promising. The city's strong economy, favorable business climate, and strategic location make it an attractive destination for businesses and investors. Continued population growth and infrastructure development are expected to drive demand for commercial properties. However, it is important to stay informed about market trends and economic indicators to make informed investment decisions.


Navigating the Louisville commercial real estate market can be a complex process, but armed with the right knowledge and information, you can make sound decisions. This comprehensive guide has provided answers to the top 10 most frequently asked questions about Louisville commercial real estate, giving you a solid foundation to begin your journey in this thriving market. Whether you're leasing, buying, or investing, remember to consult with local professionals and conduct thorough research to maximize your chances of success.

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