2011 Louisville Office Review

I'm continuing my review of Louisville Commercial Real Estate for 2011.   Today, I am looking at the Office Market.   Here is what I found -

The Numbers -

According to KCREA (Kentucky Commercial Real Estate Alliance), the Louisville metro area had 141 Leases for approximately 504,846 SF of Office space.   The median lease space was 1746 SF.   The largest Office Lease reported for 2011 was 101,000 SF at the call center on Lakefront Place.  The smallest lease reported was 150 SF.   

Regarding Office Sales, KCREA reported 46 Office Buildings / Condos sold in 2011 consisting of 352,687 SF selling for $18,092,309.   The median building size was 2782 SF while the median transaction size was $195,000.     The average selling price per square foot was $49.47.  (note: if you are checking my math, to get this figure, I had to make some adjustments because some transactions did not disclose the square footage of the property.)

The largest transaction in both size of building and dollar value was a 140,826 SF office building in the Louisville CBD.   The smallest unit sold was a 1000 SF Office Condo.   The smallest transaction was a 2942 SF Office building in Henry Co which sold for $31,000.  

What this says to me -

At 141 leases and 46 sales for the year, we are seeing about 2.7 leases and 0.9 sales per week.    It is interesting to note that 50% of the leases are for space less than 1800 SF.  Also, one single lease (the call center mentioned above) comprised 20% of the leased space reported for the year.  

Given the number of showings I had for companies looking for 30,000 SF and up last year, it is telling that of all of the leases reported on KCREA, there were only 2 recorded for more than 20,000 SF.    That seems to validate the feeling that many of my colleagues and I shared that there was a lot of activity looking at space but not nearly as much actually going to lease.    Most of the space being leased, continues to be smaller space.

For Office Sales, the activity remains somewhat light.   Things being sold are tending to be smaller properties at lower price points.   Like the leasing, it is interesting to note that the one 140,826 SF building sold comprised approximately 40% of the Square Footage of Office property sold.  

Recommendations -

My recommendations remain the same.   While I would say that things are looking better - number of calls and showing are up and unemployment is improving, I would also have to say that we continue to have a lot of inventory and downward pressure on pricing.   Successful Landlords and Sellers will keep their properties in top condition and price them competitively.

Notes, Disclaimers and Such -

BTW - If you would like me to evaluate your particular property, give me a call.   Also if you need any help on any real estate needs, I would love to help.  I am licensed in Kentucky and Indiana and specialize in Commercial Real Estate.  I work with Buyers, Sellers, Landlords, Tenants and Investors.   I handle Office, Industrial, Land, Retail and Investment properties.  Heck, I can even set you up if you need help with residential property.  

ALSO - I am sure that my broker would appreciate me clarifying that the views here are my own and do not necessarily represent those of Commonwealth Commercial Real Estate, its brokers, agents or employees (other than me, of course)  If you would like to make a comment or offer another opinion, you may feel free to do so in the comments sections.  What you should not feel free to do though is make comments which are inappropriate or offensive.  Should I see any such comments, I will delete them. 

Finally - The information gathered for this analysis comes from KCREA (Kentucky Commercial Real Estate Alliance).  This information reflects the activity of the members and participants of KCREA and therefore should not be considered a complete census of commercial activity.   It is also dependent on the individual brokers to enter and maintain their information.   As such it is subject to some error.   Never-the-less, it presents a picture of the commercial real estate activity and I believe it is useful for review and analysis.

Let me know if you have any questions or if I can be of some help.   Thanks for reading.  Hope you have a good day.

David

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

ofc: (502) 379-6005
cel: (502) 905-5274
e-mail: DMcCoy@ccre.biz