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Wednesday, April 27, 2011

New C-Store Listing - 7519 Mt Washington Rd.


I have a new Convenience Store listing at 7519 Mt. Washington Rd in Louisville near the Bullitt Co line.   This property has all of the equipment in place and in good condition.     Demographics indicate an expected population growth rate in the area of nearly 18%.     

Let me know if you know of anyone who might have an interest.  

Thanks, all.  Have a great day and stay dry!

David

David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY  40299

Friday, April 22, 2011

Bluegrass Industrial Park

I am working on some market research for a client with some property in Bluegrass Industrial Park, in Jeffersontown, KY.   I thought this information might be useful and/or interesting to some.  

Bluegrass Industrial Park

Bluegrass Industrial Park comprised approximately 1800 acres and is home to approxmiately 850 businesses with approximately 38,000 employees.   If you are unfamiliar with the Park, it is located adjacent to I-64 with two interstate exits (Hurstbourne Pkwy and Blankenbaker Pkwy).    

Sales Data

Presently (as of April 21, 2011) there are 27 Industrial Properties listed for sale on KCREA (Kentucky Commercial Real Estate Alliance).   Since January 1 of 2010, 3 industrial properties have sold in the park.    All were smaller industrial properties; the smallest being 8,400 SF while the largest was 16,693 SF.   The average size was 12,028 SF.      The average sale price per square foot was $33.95.

Leasing Data

Presently (as of April 21, 2011) there are 79 Industrial Properties listed for lease on KCREA.   Since April 1, 2010 (approximately 1 year ago) 54 leases were reported on KCREA.   The average size of the lease was 8,217 SF however the median size of the leases was 2,700 SF.      Only 6 leases exceeded 10,000 SF. 

Analysis

Although we are seeing some activity with people looking at commercial real estate, the experience of the last year would indicate that we need to remain cautious.   With some 27 properties presently listed for sale and only 3 sales reported in the last 16 months, the expected time to sell these properties would be about 12 years.    

The leasing picture is somewhat more promising.   With 79 listed properties and a reported 54 leases last year, you would expect to lease these properties in about a year and a half.   However, you need to take this news with a grain of salt.   A closer look reveals that half of these leases were for space 2,700 SF or less and nearly 90% were for less than 10,000 SF.  So smaller and shorter leases are the norm.

Things are different for spaces of 10,000 SF or more.   Presently, KCREA lists 23 industrial properties with at least 10,000 for lease.   Given that in the last year, 6 leases were reported in this size range, you would expect these properties to lease in about 4 years.   

Conclusion

Although there is evidence of improvement in the economy and increased interest, data suggests that it is still very much a buyers market.   Successful landlords will have their properties in top condition and priced competitively.  

Ending on a personal note, it looks like it is going to be a rainy weekend and it looks as though the river will be flooding.   Stay dry and have a great weekend.

Don't forget to let me know if you need any help with commercial real estate.

David

David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY  40299

Monday, April 18, 2011

Is the 1031 Tax Exchange Dead?

In the good old days, some of us can remember that real estate was considered a very good and safe investment.   It generally held its value well and some people felt like you really could not lose money on real estate.    In those times, there was a tax incentive known as a 1031 Exchange that was designed as to encourage people to reinvest their profits on real estate into new ventures.    In doing so, the property owners could defer their taxation while the economy would retain these profits as new investments.   

Enter the sub prime mortgage crisis which culminated in 2007 and 2008 ultimately contributing to a world wide recession.   Suddenly real estate prices were declining rapidly erasing years of wealth accumulation.   With many investors seeing prices less than what they paid for the assets, 1031 exchanges have declined tremendously.

Looking into my crystal ball, I would say that it would be premature to write off the 1031 exchange.   If real estate prices stablize as expected in the next year or so and price begin to rise again, those people smart enough and with enough resources to invest in the down period will be able to use it again.

Have a great day, all.

David

David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Parkway
Louisville, KY  40299

Thursday, April 14, 2011

Budget Battles in Washington

Wading into the political waters today, somewhat fearfully...  If you wonder why a commercial realtor would address a topic about the US Government budget, the answer is that commercial real estate and residential real estate for that matter is heavily dependent on the economy.  

I know that there are a lot of concerns about the budget and I do not want to take them lightly.  However, I would like to urge everyone regardless of your political beliefs to support this process.   A few years ago, during the presidential campaign, the government benefits of many European countries were often touted.   Yet, look at Europe today.   Country after country is facing financial crisis and bail outs are being routinely required that are linked to severe financial requirements for the countries receiving aid.  

The current spending of the United States has us on a similar course.   As I see it, we can either take the initiative to decide for ourselves who to resolve this crisis or allow other countries, perhaps China, to dictate those terms to us a few years down the road.   Difficult as it may be, I say let's decide our own future.

I realize that the budget is a political process but I have been angered at the comments coming from our representatives in this debate.   As we have faced hard times, who among us has not had to cut back spending 5 or 10%?   In my years as a consultant, it was sort of a rule of thumb that it would be fairly easy to get at least a 10% decrease in expenditures for any given company.   Yet many of our representatives would have us believe that more than 1% or 2% decrease in our federal budget would be catastrophic.

Again, I do not want to minimize the fact that there will be some hardships in this process.  But wouldn't it be better to have to suffer through a 5% or 10% decrease in benefits annually than to lose them completely a few years down the road because of an economic crisis where an outside entity gets to call the shots?   Ultimately, I think that our economic health is in jeapordy if we do not act.

Just my opinion.  Hope you are enjoying this beautiful day.  AND of course, be sure to let me know if you need any help with your real estate needs!

David

David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY  40299