If you are reading this and thinking that this looks very familiar, you may have already read one of my entries on 2011 Land, Office or Industrial activity. I admit that I use almost the exact same format and even wording in order to make them a little faster to get out. That said, I promise that you are not reading the same thing under a different title. In that these reports are some of the most labor intensive reports I produce, I am simply trying to be as efficient as possible. That said, let's get down to business.
I'm continuing my review of Louisville Commercial Real Estate for 2011. Today, I am looking at the Retail Market. Here is what I found -
The Numbers -
According to KCREA (Kentucky Commercial Real Estate Alliance), the Louisville metro area had 128 Leases for approximately 459,803 SF of Retail space. The median lease space was 1935 SF while the average lease was for 3,592 SF. Retail leases in 2011 ranged for spaces from 500 SF to 38,068 SF.
Regarding Retail Property Sales, KCREA reported 53 Retail Buildings sold in 2011 consisting of 291,022 SF selling for $14,289,750. The median building size was 4,200 SF while the median transaction size was $200,000. The average selling price per square foot was $50.70 and the average building size was 5,491 SF. The average sale was for $269,618. (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 or had invalid numbers entered.)
The largest Retail sales transaction was a 30,000 SF Building in Louisville which sold for $1,069,000. The smallest unit sold was a 718 SF unit which sold for $109,000. The smallest transaction in terms of price was a 1,756 SF unit in the CBD which sold for $14,000.
What this says to me -
At 128 leases and 53 sales for the year, we are seeing about 2.4 leases and 1.0 sales per week. Half of the leases are for less than 1,935 SF. It is interesting to note that the Retail market is far more uniform than the Office or Industrial market. This tells me that in 2011, there were few larger leases to dominate the statistics. While information on the term of the leases is not provided in the KCREA stats, conversations with other brokers leads me to believe that we are continuing to have shorter term leases.
For Retail Property Sales, more has been selling although again, mainly smaller properties at lower prices. It is worth noting that although there were more Retail Property sales, that the total dollar amount of the Retail Sales was much less than that for either Office or Industrial properties.
Recommendations -
The figures for Retail indicate that Retail Property is continuing to struggle. There was very little big box activity in Louisville in 2011 which you would expect when Retail Sales are down nationally. The improvement in Retail sales in late 2011 should bode well for 2012. If the economy continues to improve and especially locally if unemployment continues to improve, we can expect Retailers to begin to test the waters for expansion again.
That said, it may be a while for this to happen and so my recommendations remain the same. I would say that things are looking better. My retail colleagues in the office tell me that December was a very good month. Still, 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
No comments:
Post a Comment