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Louisvilleand MULTIFAMILY MARKET OVERVIEW 20 AND CBD 21 LOUISVILLE NATIONAL GEOGRAPHIC LOUISVILLE: THE STAR OF THE SOUTHEAST NAMED LOUISVILLE “BEST SMALL Louisville has emerged as a “young Nashville” and represents the northern edge of the Southeast. It has developed an CITIES IN THE expanding base of increasingly diverse capital that recognizes this mid-sized city as a growth pocket in the center of U.S.” the U.S. and a diverse, riverfront city. In recent years Louisville has been recognized as a place of “Free-wheeling Innovation and Growth” (TIME Magazine), a “Top Metro” (Site Selection Magazine), in the “Top 10 Places for New Business” (Smart Asset) and “fifth most business-friendly large American cities of the future” (fDi Intelligence), all of which are helping to attract new jobs and unprecedented investor attention. The metro is a nationally-recognized regional distribution and warehousing hub serving major operations including Amazon, UPS, Ford Motor Company and General Electric. The city has recently launched the Greater Louisville 2020 Transformational Initiative, an aggressive and comprehensive growth and capacity-building initiative centered around recruitment, retention and advocating Louisville’s already favorable business environment. LOUISVILLE MSA “AT A GLANCE” TOP REASONS TO INVEST IN LOUISVILLE 2019 Population 1,297,310 • PRIME, CENTRALIZED LOCATION—within a one-day drive of two- thirds of the nation’s population 2035 Population (Projected) 1,500,000 • STRONG CORPORATE BASE—numerous Fortune 500, Fortune 1000, regional, national and international corporations have Household Growth Projection (2010-2040) 26% headquarters or a large presence in the metro area Employment (December 2019) 674,800 • GLOBAL LEADER IN AIR CARGO TRAFFIC— Louisville ranked #7 in the world by Airports Council International Unemployment Rate (November 2018) 3.3% • NATIONALLY RECOGNIZED BUSINESS SCHOOL—University of Louisville’s School of Business nationally recognized as one of the New & Retained Jobs (2012-2020) 76,000 best business schools by U.S. News & World Report Fortune 500 Headquarter Companies 3 • RICH CULTURE AND QUALITY OF LIFE—the city draws attention for being vibrant and sophisticated as well as culturally rich and Source: U.S. Census; Bureau of Labor Statistics,University of Louisville, Kentucky hospitable. Louisville was recognized by Forbes Magazine as a State Data Center cultural hub for the country in 2019 • ECONOMIC DRIVERS—Louisville’s thriving economy is driven by five major sectors: Healthcare, Business Services, Logistics & E-Commerce, Manufacturing and Tourism • GROWTH & DEVELOPMENT—Louisville is in the midst of an economic renaissance with $14B in new capital investment since 2011 2020 MARKET OVERVIEW A HAVEN FOR NOTABLE EMPLOYERS LOUISVILLE MSA TOP EMPLOYERS LOUISVILLE’S MAJOR CORPORATE HQ COMPANY NAME # EMPLOYEES COMPANY NAME # EMPLOYEES Humana | Fortune 100 12,000 UPS 21,233 GE Appliances 6,000 JEFFERSON COUNTY PUBLIC SCHOOLS 14,476 U of L Health 6,000 Manna, Inc. 2,300 FORD MOTOR COMPANY 12,600 ResCare Inc. 1,948 Papa Johns 1,626 NORTON HEALTHCARE 12,247 Kindred Healthcare | Fortune 1,000 1,571 Churchill Downs 1,515 HUMANA, INC. 12,000 Samtec Inc. 1,500 Texas Roadhouse | Fortune 1,000 1,500 UNIVERSITY OF LOUISVILLE 6,933 Rawlings Group 1,440 Brown-Forman Corp | Fortune 1,000 1,300 A LARGE ONLINE RETAILER 6,500 Signature HealthCARE 900 Yum! Brands Inc. | Fortune 1,000 800 LOUISVILLE METRO GOVERNMENT 6,226 BAPTIST HEALTHCARE SYSTEMS 6,159 GE APPLIANCES 6,000 U of L HEALTH 6,000 KROGER 3,079 LOUISVILLE HAS CREATED SPECTRUM 2,400 80,000 NEW JOBS & 2,700 MANNA, INC. 2,300 NEW BUSINESSES SINCE 2011 Source: Business First, December 2018 3 LOUISVILLE RANKED AS ONE LOUISVILLE MSA ECONOMIC STATISTICS OF 7 BEST CITIES FOR FIRST-TIME HOMEBUYERS— LIVABILITY 80,000 $234,675 40.1% Jobs Created Since 2011 Average Home Value College-Educated, Working-Aged Adults EMPLOYMENT GROWTH* HOUSEHOLD GROWTH Employment Growth Household Growth 650,000 12.0% 515,000 640,000 10.0% 510,000 630,000 8.0% 620,000 505,000 610,000 6.0% Employees Households 500,000 600,000 4.0% 590,000 495,000 2.0% 580,000 570,000 0.0% 490,000 2011 2012 2013 2014 2015 2016 2017 2018 2019 485,000 Employed Unemployment Rate 2011 2012 2013 2014 2015 2016 2017 2018 2019 MEDIAN HOUSEHOLD INCOME* POPULATION GROWTH* Median Household Income Total Population $70,000 1,310,000 $60,000 1,300,000 $50,000 1,290,000 $40,000 1,280,000 $30,000 Population 1,270,000 $20,000 1,260,000 Median Household Income $10,000 1,250,000 $0 2011 2012 2013 2014 2015 2016 2017 2018 2019 1,240,000 2011 2012 2013 2014 2015 2016 2017 2018 Sources: U.S. Census Bureau, American Community Surveys 2020 MARKET OVERVIEW LOUISVILLE MSA MULTIFAMILY STATISTICS TOTAL MARKET RENT AND OCCUPANCY TOTAL MARKET RENT AND OCCUPANCY $1,000 96.5% $900 96.0% $800 95.5% $700 95.0% HOUSEHOLD GROWTH $600 $500 94.5% $400 94.0% $300 Average Rent Rate Average 93.5% $200 $100 93.0% $0 92.5% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Average Rent Occupancy Rate A-GRADE CAP RATES POPULATION GROWTH* A-Grade Cap Rates 8.00% 7.00% 6.00% 5.00% 4.00% Cap Rate 3.00% 2.00% 1.00% 0.00% 2011 2012 2013 2014 2015 2016 2017 2018 2019 5 INVESTMENTS DRIVE DEVELOPMENT Louisville, the state’s largest metropolitan area, is a vibrant riverfront MAJOR DEVELOPMENTS (PARTIAL LIST) city with a growing population, diversification of employment and an attractive multifamily supply/demand balance. Louisville is home NAME STATUS PRICE to ten Fortune 500 companies, three of which are headquartered in Waterfront Botanical Gardens Under Construction $60M the city. The metro is a nationally recognized regional distribution and Norton Sports Health Athletics & Learning Complex Under Construction $52M warehousing hub, serving major operations including Amazon, UPS, Ford Motor Company and General Electric. With a highly Paristown Point Arts District Under Construction $28M successful series of major distribution facilities now open, and Old Brownsboro Crossings MOB Complete $20M future capital investments in distribution parks planned, Louisville Complete continues to be the focus of institutional investment. Louisville FC Stadium $65M Parklands of Floyds Fork Complete $120M Leading this remarkable transformation from a city known mostly for UPS Worldport Centennial Hub Complete $300M horse racing to a logistics giant, is the development and expansion of Complete $475M UPS Worldport, the corporation’s main global air hub for its distribution The Novak Center for Children’s Health business across the US. A series of substantial improvements has steadily Convention Center Expansion Complete $720M boosted UPS employment in the Louisville metro The additional logistics Omni Multi-Use Development Complete $754M jobs created over the past five years have had a multiplier effect in KFC Yum! Center Complete $1.38B several areas, including retail and office support positions. Ohio River Bridges Project Complete $2.6B With twenty-plus employers in the healthcare sector, Louisville is at the forefront of the nation’s healthcare trends and is home to the largest cluster of aging care businesses in the country. Nationally recognized Fortune 500 companies Humana and Kindred Healthcare THE CBD IS ANCHORED BY are headquartered in Louisville, and hire a steady stream of IT and COMPUTERSHARE—a global financial services firm with more healthcare professionals in high-paying positions. Yum! Brands (Fortune than 600 employees in the CBD. The company has plans to 500), one of the world’s largest restaurant holding companies, is hire an additional 500 in coming years. also headquartered in Louisville. These employers’ presence in HUMANA—approximately 12,000 employees in Louisville Greater Louisville bring stable demand for apartment housing, and is with the vast majority located in the CBD. an immeasurable economic driver for the success of the multifamily market. Building upon the city’s healthcare, research and life sciences KINDRED HEALTH—a Fortune 1000 company with industries, the University of Louisville Foundation initiated a project to over 1,500 employees headquarted in Louisville. foster economic development and innovation for Louisville’s downtown LOUISVILLE INTERNATIONAL AIRPORT -— is home to the community, called Nucleus Innovation Park, a nine-acre urban largest fully automated package handling facility in the world, life science research park located along the eastern edge of turning over an average of 130 aircrafts and processing an downtown Louisville. average of 16M packages a day. THE UNIVERSITY OF LOUISVILLE—Nearly 23,000 students Louisville is in the midst of an economic renaissance with $14B in new and 7,000+ employees. capital investment since 2011. Louisville Forward, the city’s organization for economic development, focuses on making Louisville a premier BROWN FORMAN— headquartered in Louisville with 1,300 employees destination through business attraction, retention and expansion. 7 15% OF WORKFORCE LIFELONG INNOVATION EMPLOYED IN HEALTHCARE SECTOR GREATER LOUISVILLE’S AGING-CARE COMPANIES EMPLOY 21,000 PEOPLE AND GENERATE $50B IN REVENUE. LIFELONG WELLNESS AND AGING CARE HEALTHCARE-RELATED AND MEDICAL TECHNOLOGY COMPANIES INCLUDE: Highlighted by Forbes as home to the largest cluster of aging care businesses. Eurofins Option Care Enterprises, Crown World Dental Lab (HQ) Inc. US WorldMeds, LLC (HQ) CareSource Waystar Omnicare PhamaCord LLC (HQ) MedSynergies/Optum RxCrossroads PARx Solutions National Stem Cell Foundation WellCare Health Plans (HQ) Amgen, Inc. Talaris Therapeutics (HQ) UnitedHealthcare Carewise Health Lucina Health Anthem Genentech Conifer Health Solutions AmerisourceBergen Aetna Medline Delta Dental Cardinal Health Concentra McKesson 2020 MARKET OVERVIEW THE MSA BAR CONTINUES TO RISE 95.2% 939 $912 $0.97 1.0% Average Average Average Average Annual Effective Occupancy Square Feet Rent Rent PSF Rent Growth SELECT INSTITUTIONAL Multifamily demand in Louisville is at an all-time high, driving EQUITY SOURCES new housing and mixed-use developments that are attracting ACRE Real Estate highly educated, highly compensated residents and adding to Almanac/Mount Auburn the MSA’s growth and vibrancy.
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