Kentucky Industrial Review: More Than Fried Chicken & The Derby!
Kentucky, a mid-sized state in the Southeast, is situated along the Appalachian Mountains. The state's major urban centers include Louisville and Lexington, with Frankfort serving as its capital. Kentucky is most known for the Kentucky Derby, its world-famous Bourbon production, and the University of Kentucky; However, Kentucky’s economic strength, in regard to its industrial market should not be underestimated.
Kentucky's industrial sector has shown strong growth, driven particularly by the vehicle manufacturing, appliance manufacturing, and international postage industries. In fact, Kentucky was ranked 1st in the South-Central region and 5th Nationally for Economic Development in Site Selection Magazine’s 2023 Prosperity Cup. The manufacturing industry alone accounts for nearly 15% of the state's total employment.
Recently, Ford secured a substantial $9.2billion federal loan to establish two battery manufacturing plants in Glendale,KY (south of Louisville), in addition to another plant in Tennessee. Simultaneously, Toyota is investing $2.1 billion in a battery plant in North Carolina, which will supply batteries to their Kentucky facility for their first US-made electric vehicles.
The state's key industrial markets are centered around the Cincinnati-Wilmington-Maysville, OH-KY-IN market,Louisville market, and Lexington market. Louisville, in particular, holds a strategic geographical advantage, being within a one-day drive of approximately60% of cities across the United States. Moreover, recent data for the 2nd quarter of 2023 has positioned the Louisville market at the forefront, leading in various metrics such as annual rent growth, 12-month net absorption SF, population size, and median household income within the state of Kentucky.
The industrial significance of Louisville is further underscored by its association with major corporations. For instance, Louisville is home to UPS Worldport, which makes Louisville Muhammad Ali InternationalAirport the 2nd busiest cargo airport in the United States.Furthermore, GE Appliance Park, serving as the global headquarters and primary operations center for GE Appliances, is located in Louisville. Notably,Louisville also boasts a rich automotive history, as Ford automotive began the manufacturing of Model T vehicles in the city back in 1913. Presently, Louisville houses a substantial 3.15 million square feet assembly plant and a 4.63 million square feet truck assembly plant operated by Ford.
Our Role
The tenant for Legacy West Partners’ Kentucky Industrial Portfolio is Precision Metal Works (“PMW”). PMW has been in business for over 75 years since 1947, performing metal forming, assembly, and finishing. PMW fulfills these metal processes for a number of industries, including automotive, appliance, hardware, electronic, and medical. In fact, PMW has estimated that about 48-55% of their business comes from GE Appliances. Overall, these buildings contain machinery and processes that are integral to the existing industrial market in Kentucky.