With the Holiday season in full swing, most people and businesses are preoccupied with things other than Commercial Real Estate. This has left me with a quiet morning with time to do some research on KCREA. KCREA, in case you are unfamiliar, is the Kentucky Commercial Real Estate Alliance which provides our commercial real estate information exchange. This CIE is similar to an MLS.
Commercial Real Estate Inventory Up
This morning there are 3132 commercial real estate listings on KCREA, with 1647 of those being for lease and 1485 being for sale. Inventory levels are trending up with normal total listing staying around 3000 listings, generally breaking down to about 1400 sale listings and 1600 lease listings. Doing the math for you, that would equate to sale listings being up about 6% while lease listings are up 3%.
Commercial Real Estate Transactions Down
The number of commercial real estate transactions for the last 7 days were down with 5 leases reported and 1 sale reported. This compared to the average number of transactions YTD (approximately 49 week period) of 7.5 leases and 3.7 sales. Because of the holidays, I would not consider this to be abnormal or of any concern, in and of itself.
Inventory Turn Over Rates
At the YTD levels of activity and these inventory levels, we would expect it to take approximately 4.2 years to lease all of the present lease listings and approximately 7.7 years to sell all of the present sales listings. If we took the prior week levels of activity, we have a much more sobering picture with a projected 6.3 year horizon to lease all current listings and a projected 28.6 year horizon to sell all current sale listings.
Final Word
The obvious first conclusion is that the recession is still with us and it is still a buyer's market in commercial real estate. But in spite of the recession, there are transactions being completed. On average for the year, there is about 1 lease every day and about 1 sale every other day. Although these are not huge numbers, there is definitely activity in the market. The important thing for a seller / landlord to consider is how long they are willing / able to wait to sell or lease their property. In this market, sellers and landlords need to be aggressive to get their property moved. Considering the market information above, those pricing their property at average market rates, can expect a long wait.
KCREA Notes
This information is provided by the individual brokers and is dependent on them to keep it accurate and current. This is not a census of commercial real estate activity. It only contains that information provided by members of KCREA. While this information is not independently verified, I believe that it is a good tool and indicator of the market activity.
Thanks, all. Have a good day and stay warm!
David
David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY 40299
PS Please call me with your real estate needs. I am licensed in KY and IN and work with all types of commercial real estate.
