Commercial Land - Market Activity and Analysis

As luck would have it, I have several Commercial Land listings again.  Recently I have shared some analysis of the Commercial Land - market activity with some of my land clients.  So I thought I would share it here as well.  

 

In general, there was sort of a bump of activity last year (2012) and there were signs of interest  with a number of calls in the first quarter 2013 on land but it seems that things have quieted down a little as we enter into the summer.  

Looking back at Commercial Land sales, I found that KCREA (Kentucky Commercial Real Estate Association – our Commercial Information Exchange) reported 23 sales of commercial land larger than 5 acres for the 12 month period beginning 4/1/2012.    So about 2 sales per month.   Interestingly, 8 of those 23 were foreclosure sales, auctions or bank sales.   In April of 2013, there were 253 commercial land properties larger than 5 acres which were listed for sale on KCREA.  So there is presently about an 11 year supply of land on the market.

It is no longer news that commercial land in general depreciated about 40% since 2008.  What this tells us is that with roughly a third of the commercial land sales being distressed sales, and an 11 year supply of land at current consumption rate, we can see this downward pressure on prices is still with us.  

On the positive side, the metro market area’s Industrial occupancy is very high and we are beginning to see a shortage of Industrial space.   This has led to some Industrial spec projects for the first time in quite a while.  If this demand continues and if financial institutions begin to loosen their credit somewhat and allow more of these projects, we should expect to see the demand for commercial land to increase in tandem with this activity.  

Of course, land is not a homogenous product.   Location, size, zoning, traffic, roads, visibility, availability of utilities are all factors in addition to price as projects come available.   Each of these will ultimately be a factor in the demand for a particular parcel when new projects are being considered.  

Let me know if you have any questions. 

 

I hope you have a great day!

 

Side note - I am a licensed real estate broker in Kentucky and Indiana and I specialize in Commercial Real Estate.  I handle Office, Industrial, Retail, Commercial Land, Investment and International Properties.   I work with Sellers, Buyers, Landlords, Tenants, and Investors.   Heck I can even set you up with a Residential specialist if you need help.   If you need any help with real estate, give me a call or send me an e-mail.  I would love to help.   

 

David

 

David W. McCoy

Associate Broker

Commonwealth Commercial Real Estate

10444 Bluegrass Parkway

Louisville, KY  40299

 

office: (502) 379-6005

Cell: (502) 905-5274

e-mail: DMcCoy@ccre.biz