Bluegrass Industrial Park Activity

I have been surprised at how many people were interested in my post on Bluegrass Industrial Park from last April.    I am reviewing a listing I have in the park and decided to update the information.

Sales Data

Currently (as of 12/13/2011) there are 26 Industrial Properties listed for sale on KCREA (Kentucky Commercial Real Estate Alliance) which is about the same inventory level as last April.   Three Industrial properties in the Park have sold in the six month period since then (period of 5/1/2011 to 11/30/2011).   This included one 7200 SF facility, a 37,175 warehouse distribution building, and a 61,164 SF building.   

Leasing Data

As of 12/13/2011, there are 64 Industrial properties for Lease in Bluegrass Industrial Park.   This is a pretty good sized drop in Inventory from the 79 properties which were listed last April.    In the last 6 months, KCREA reported 36 leases signed.   Only 5 of these leases exceeded 10,000 SF.  

Analysis

It has seemed as though the market in Bluegrass has been improving and this snap shot of the Park would seem to confirm this.   Three sales in six months compared to three sales in eighteen months is a marked improvement.   At this rate, we would expect the time to sell the existing properties to be about 4 years.   Of course, this is still a long time but it is a big improvement over the 12 year expected rate from 6 months ago.    Still with only three data points, we need to be cautious in our optimism.   Certainly this is good news but thee sales does not necessarily indicate a trend.

Leasing also seems to have improved.   A decrease in the number of available properties and increase in the number of leases both bode well.    With an inventory of 64 properties for lease and 36 leases in 6 months, we might expect the existing inventory to be leased in about 11 months.   Once again though, when we look a little closer, we see that only 5 of these lease were for properties larger than 10,000 SF.   If we arbitrarily divide the market at the 10,000 SF line, we see things a little differently.  

• Below 10,000 SF, we see an inventory level of 45 property with 31 properties leased in the last 6 months.   At this rate, we would expect the inventory of properties under 10,000 SF to lease in about 7 and 1/2 months.  
• Above 10,000 SF, we see an inventory level of 19 properties with 5 properties leasing in the last six months.   At this rate, we would expet the inventory of properties above 10,000 SF to lease in about about 23 months, which is about half of the time we  would have expected last April.

Conclusion

I think that it is a little too soon to call the outlook rosy but things certainly look much better than they did 6 months ago.   Louisville has had some good economic news and the economy for the country has been improving.   I think that this is reflected in this activity.   What is harder to measure is business outlook.    On the street, I am still hearing a lot of worry among business owners.   A lot of deals are continuing to fall apart in the current economic climate and a lot of business owners are still trying to plan cautiously, asking for steep discounts and for short term leases.  Although things look better, I still recommend that Landlord keep their properties in top condition and keep them priced competitively.

Have a great day, everyone and good luck with your holiday shopping!  

Notes, Disclaimers and Other Info -

The information in this analysis came from the Kentucky Commercial Real Estate Alliance  (KCREA).   This information is maintained individually by the subscribing Commercial brokers and is not necessarily an accurate census of the activity.   It is only the information provided by the cooperating brokers and its accuracy is dependent on the individual brokers efforts to maintain their information.   Never-the-less, I think that it is a good indicator of the market at large.

ALSO, I am sure that my broker would appreciate me clarifying that the views provided here are my own and do not necessarily represent the views or opinions of Commonwealth Commercial Real Estate, its brokers, agents or employees (other than me of course)   You are welcome to present other opinions in the comments if you so desire.   HOWEVER, you are not welcome to make inappropriate or hateful comments.   Should I see any such comments, I will exercise my right to delete them.

AND FINALLY - If you know someone who would like some help with real estate, give me a call.  I work with Tenants, Landlords, Buyers, Sellers, and Investors.   I handle Office, Industrial, Land, Investment and Retail properties.   Heck, I can even hook you up with someone to help you with your residential real estate needs.    Give me a call, I would love to hear from you.

Thanks for reading! 

David

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

www.ccre.biz