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

 

 

Commercial Land - New Listing on I-65 Interchange

I have a new Commercial Land listing on an Interstate Interchange in Shepherdsville, KY.   There are 77 acres on the southeast quadrant of I-65 and Hwy 44.  It is situated at exit 117 of I-65, 11 miles from Louisville International Airport and UPS World Port.    This property has great highway visability with approximately 2500 feet of frontage on I-65.   All utilities are available.  For sale at $120,000 per acre.  

For more information on this listing or other Commercial Land, give me a call or e-mail me.   My contact information is below.

Thanks and have a great day! 

David

David W. McCoy, MBA
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

Note - If you have questions about this or about any Commercial Real Estate, please feel free to contact me.   I am a specialist in Commercial Real Estate and I handle Office, Industrial, Commercial Land, Investment and Retail Properties.  I work with Landlords, Tenants, Sellers, Buyers and Investors.     I am also an International Property Specialist and have specialized training to help international real estate investors with real estate needs here as well as US citizens and companies needing assistance internationally.   Heck, I can even set you up with residential help if you need it.    Give me a call.  I would love to help.

Disclaimers - While the information provided is from sources which we deem to be reliable, Commonwealth Commmercial Real Estate cannot warrant this information.    All information provided is subject to review and verification by the interested party as part of the due diligence process. 

KCREA goes International

If you are looking for Commercial Real Estate in Louisville and you are asking a residential realtor and looking at the MLS, I'm afraid that you are searching about 7 or 8 years too late.    Please don't misunderstand, I am not knocking residential realtors at all.  It is just that the MLS eliminated commercial properties from their data base about 7 years ago.   

There are several on-line listing services which provide information on Commercial Real Estate.  I use several and I think that most of the commercial real estate specialists do as well.   Locally, KCREA, the Kentucky Commercial Real Estate Association, has most of those listings.   

KCREA is constantly evolving.  It is not perfect but it does seem to be actively trying to improve.   So I was pleased when I recently discovered that KCREA now has an option to translate the listing into several different languages.   If you do a search for a property and click on one, on the right side of the page, down several lines is an option to translate the page.  If you click on that option, several icons of flags appear.   If you are not familiar with the flags, when you roll over the flags, a label appears displaying the language.  (Languages include: Spanish, Chinese, French, German, Italian, Japanese, Korean, Russian and Hebrew)  Click on the flag and the page will translate.

Pretty cool.   Now, as Paul Harvey would say, the rest of the story.   I speak a little Spanish and truth be told, the translation is not perfect.   Still, while the translation could be a little better, it certainly would be largely understandable to a Spanish speaker.  They might be somewhat amused at the translation but I suspect that they would be able to get the basic information and a decent understanding of what it being offered.  

I for one, think that this is a big step forward.   In our market, this is not yet a major issue although, in our office, we have worked with Cuban immigrants, who spoke almost no English, Russian business owners, who fortunately were bilingual, and Chinese business owners, who brought their kids to translate for them.   In some of our high schools, the students are speaking 30 or 40 different languages as their native language.  

Check it out.   You can go to www.KCREA.com and do some searching.   Then click on the Translate option and select a language.   If you find that you need some help, let me know. 

Thanks for reading and have a great day!

David

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

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

Let me know if you need help with Commercial Real Estate.  I am a licensed Real Estate Broker in Kentucky and Indiana and I specialize in Commercial Property.  I handle Office, Industrial, Commercial Land, Investment, and Retail properties.   I work with Landlords, Tenants, Sellers, Buyers, and Investors.     Heck, I can even set you up with some help from a residential realtor if you need it.  Give me a call.  I would love to help.

New Adventures

I have mentioned a couple of times that I am declaring 2013 to be the Year of Prosperity, which is all well and good but one might legitimately ask how I expect that to play out.   At the end of 2012, I sat down to think about how I wanted to direct my life and career.   

I thought about things that I really loved and things that I really wanted to accomplish then looked at the talents I had in my tool box to see how I might make that happen. 

• I love languages and cultures. 
• I love travel and exploring.  
• I love interacting with other people.  
• I have an extensive background in Commercial Real Estate. 
• I am conversant in Spanish.  
• I have traveled a lot through out the Americas.     

From that, I decided that I needed to explore some new areas.  The obvious first step is to look into International Real Estate.    To be honest, I am not really sure how people make a living practicing international real estate but I intend to find out.    My hope is that I will be able to incorporate a practice of International Real Estate into my practice of Commercial Real Estate.  

Step One - I am going to Costa Rica this year for a conference on International Real Estate where I will get to network with some practitioners and hopefully get some insights.   Also, I will complete the National Association of Realtors courses for a designation of Certified International Property Specialist.     After that, I will evaluate whether this is something that looks promising.  If so, I am considering going for a visit to Brazil later in the year.    

In any event, it is looking like 2013 is going to be an exciting year.   

When I get back, I will share some of my insights.     

Thanks so much for reading!  Hope you have a great 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

Let me know if you would like some help with Commercial Real Estate.  I am a licensed Real Estate Broker in Kentucky and Indiana and I specialize in Commercial Real Estate.  I handle Office, Industrial, Commercial Land, Investment and Retail properties.   I work with Sellers, Buyers, Landlords and Tenants.   Heck, I can even find you some help with Residential Real Estate if you need it.   

Could it be that the Recession is Over?

Earlier this week, I told some buddies that it has been so long since I saw a crane, I wasn't sure I could recognize one.   One responded, "What's a crane?"  The other told him, "It's a bird with long legs that lives near marshes."

We've been burned before thinking that the Great Recession was over.   Technically, I guess from its true economic definition, the recession has been over for nearly 3 years but this has been a recession without a recovery, so far.  

Perhaps, in Louisville at least, the recovery we have been waiting for is finally here.   We have had several indicators -

• Town Center retail center - known by most as the home of Tinseltown sold in late 2011 for close to twice as much as its purchase price just a few years before
• Cabela's, a large outdoor retailer, announced plans to build a new store by Lowes and Costco at Brownsboro Crossing. 
• Central Station retail center, close to Churchill Downs recently sold to an out of state investor
• River Ridge, in Jeffersonville, Indiana, has a new 1,000,000 SF warehouse being built by a so far undisclosed company
• Bullitt County has another still undisclosed company presently looking for land to build another 1,000,000 SF warehouse.
• The new North Hurstboure Parkway Class A Office building built by Faulkner, the only spec Class A Office building I can think of for the last several years, is nearly completely leased after only being officially open for a few weeks.

In addition, there are less concrete indicators -

• We have been getting inquiries from businesses that are suppliers to some of our larger employers, saying that they need more space to gear up for new contracts and increased activity.
• Whereas last year I would sometimes ask friends to call my phone to be sure that it was working, now our phones are ringing again.
• Several companies are now at least looking at new space.  Much of this is taking advantage of better lease rates while they are still down and long term leases are expiring.   Still, there is more activity than there has been in quite a while. 

As I mentioned in the outset, we have been burned before, so I won't be buying a new car right away.   Still, things are looking more positive than they have in quite a while.   

Hope you have a great day!

BTW - If you need some Real Estate help, give me a call!   I specialize in commercial real estate and work with Buyers, Sellers, Landlords, Tenants and Investors.  I handle Office, Industrial, Land, Retail and Investment properties.  Heck I can even set you up with help for residential properties. 

ALSO - I am sure that my managing broker would appreciate me clarifying that the views expressed here are my own and do not necessarily reflect those of Commonwealth Commercial Real Estate, its brokers, agents, or employees, other than me, of course.    Should you like to make a comment or offer another point of view, you may feel free to do so in the comments or you may contact me directly.   You should not feel free however to make any comments which are inappropriate or offensive.   Should I see any such comments, I will exercise my right to delete them.

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

2011 Review of Louisville Commercial Land Sales

As I begin my planning for 2012, I am taking a final look at 2011.    Today, I analyzed Commercial Land Sales for last year.   Here is what I found:

The Numbers

For all of 2011, KCREA recorded 30 land sales for a total of 1020.25 Acres selling at $9,811,546.    The average parcel size was 34 acres and average sales price per acre was $9,683.   The average transaction size was $338,329.    Median parcel size was 4.86 acres and median dollar value of a transaction was $226,250.

The largest transaction in terms of dollar value and also tract size was a 410 acre parcel in New Washington, Indiana which sold for $1,300,000.   The smallest transaction in terms of dollar value and tract size was a 0.06 acre tract in downtown Louisville which sold for $10,000.

This amounts to 8 transactions totaling $1,990,000 in 4th Quarter 2011 for an average transaction of $248,750.

What this means

If you are looking at the numbers alone, 2011 was another draught for Commercial Land and Development, in general.    With only 30 total transactions recorded for the year, one would expect only 2.5 land sales in any given month.    Looking at the average price of property sold, you would also conclude that the vast majority of the land sold was unimproved land which was not ready for development.  

Development is a highly leveraged business so that when it goes well, the payoff is great but if it doesn't go well, the possibility of loss is also magnified.   It is well known that many Developers went out of business in this recession and that many remain under water.   The Developers remaining are far more cautious, both because of their risk aversion as well as that of their lenders.   In this environment, we should expect the recovery for Land to progress slowly.

Still, as I mention in November, there are beginning to be some encouraging signs.   The number of calls on land is up.   And although these transactions did not go through, I had respectable offers on three separate parcels of land I have listed in the last quarter of 2011.   I am also aware of some new plans for some decent sized developments that are in the works for 2012.

The things that I expect to move in 2012 are parcels that are competitively priced, already zoned properly and have infrastructure in place.  

Anyway, I am looking forward to a good year in 2012.  Have a great day, everyone.  Thanks for reading.

Notes and Disclaimers and such -

If you know of anyone who would like help with real estate, give me a call. I am licensed in Kentucky and Indiana. I specialize in Commercial Real Estate and handle Office, Industrial, Land, Investment and Retail properties. I work with Buyers, Sellers, Landlords, Tenants and Investors. Heck, I can even set you up with some help for residential property if you need it.

The Information presented here comes from KCREA (Kentucky Commercial Real Estate Alliance) data base.   This information is dependent on the individual members keeping it current and accurate.   It is not a census of all commercial transactions.  It contains only the information of the members of KCREA and other who contribute.   As such, I cannot guarantee its accuracy.   Still I believe that it is a good indicator of activity and is useful to examine.Also, I am sure that my broker would appreciate me clarifying that the views represented here are my own and do not necessarily represent the views of Commonwealth Commercial Real Estate, its brokers, agents, or employees (other than me of course).   Should you wish to comment on this post or to offer another opinion, you may feel free to do so in the comments section.   What you should not feel free to do however, is to make any inappropriate or offensive comments.   Should I encounter any such comments, I will exercise my right to delete them. 


Have a great 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
www.ccre.biz

Jefferson Pavilion - Development Parcels Adjacent to Jefferson Mall



For my property promotion today, I am looking for people that might need some land.  I have Three very nice Development parcels available adjacent to Jefferson Mall which are shaded red in the aerial shot above.   Features include –

• 3 development parcels available –
• parcel 1 - approximately 1.5 acres adjacent to GFS and Target - available at $375,000 / acre
• parcel 2 – approximately 2.2 acres with frontage on Jefferson Blvd – available at $375,000 /acre
• parcel 3 – approximately 16.5 acres adjacent to Target  - available at $175,000 / acre
• Adjacent to Jefferson Mall home of more than 100 retail stores, including Macy’s, Dillard’s, Sears and JC Penney.   
• Property already zoned C-2
• All utilities are to site

The smaller sites would be great for smaller stand alone retail or office sites.   The large site could be a good site for a big box retail use, assisted living, or perhaps multifamily .     If you know of someone who might have an interest, please let me know or have them give me a call.  

Thanks so much for the help!  

BTW - If you need help with your real estate needs, give me a call.   I specialize in Commercial Real Estate and work with Landlords, Tenants, Buyers, Sellers and Investors.   I handle Office, Industrial, Land, Investment and Retail properties.   Heck, I can even hook you up with someone if you need help with residential property.   I would love to help if I can.

David

David W. McCoy

Associate Broker

Commonwealth Commercial Real Estate

10444 Bluegrass Pkwy

Louisville, KY  40299

Turn Around for Land?

There was a time when a Commercial Real Estate Broker could make a decent living selling nothing but land.   These days there has been so little Development that there has been very little demand for land.   As noted in my most recent KCREA 3rd Quarter Review, the little land which has sold has largely been smaller parcels which are not ready for commercial development.  

Lately, however, I have noticed lately that we are begining to have some interest in land again.   Consider the following:

• Beginning in the Summer, I had some calls on some land that I have listed next to Jefferson Mall.  
• I had some brokers calling who were working with some restaurants looking for possible sites in the county.   
• Another site in the Jefferson Mall area is beginning development for what is rumored to be one big box retailer and 2 or 3 stand alone restaurants. 
• I had a call from a broker working with an Apartment developer and an Assisted Living developer looking for sites.   
• Zappos in Bullitt County reportedly is looking at a couple of 100 to 150 acre sites for their expansion

Although things are still a long way from where we were a few years ago, I presently have offers on two of my land listings.   I'm not sure that we have seen enough activity to call it a trend but at least there are some hopeful signs that a turn around in land could be coming.

By the way, if you need help with Land or with any other aspect of Commercial Real Estate, please give me a call.  I work with Buyers, Sellers, Landlords and Tenants with Office, Industrial, Land, Investment and Retail Properties.   I am licensed in Kentucky and Indiana.     I would love to help.

Have a great day, everyone.   Thanks!

David

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

Site Selection and Building projects

About a week ago, a gentleman from a local church called to ask about land I have listed.   His church was facing a possible eminent domain issue where a government project might have to take their land.   The church had decided that if they had to move, they would build a new facility.   Accordingly, they were looking for raw land.   Their primary concern in their search was finding an appropriate location.

If only life were so easy.   Finding land is actually much more complicated than that.   Location is certainly an important factor but it is only one of several factors you need to consider.   You also have to consider zoning.   If a parcel of land is not zoned properly, you cannot build on it unless you get the property rezoned.    Right now a rezoning in Jefferson County, KY usually takes a minimum of 9 months and may take up to 18 months.     Luckily, a church may be in any zoning.

You also have to consider infrastructure.   Does the land have water, sewer, electrical service, and gas service?    Sewer service is especially critical in Jefferson County today.    Much of the land in Jeffersontown can not presently be developed because of a lack of sewer capacity in that area.  This is also true in Prospect and several other areas of Jefferson County.

Another consideration is the size of the land.    One thing people forget to consider is the amount of space necessary for parking or the required set backs on a piece of land.   This may make the amount of land you need much larger than you might expect.    This gentleman told me that they estimated that they needed parking for 400 to 500 cars.   That is a lot of parking.   Depending on how the parking is configured, you can expect to get somewhere between 130 and 200 parking spaces per acre.  (probably closer to 130)   So this church would need 3 to 4 acres just for the parking.  

Other important questions to consider:

• Is this in the flood plain?
• What is the topography of the site?
• Is it in a historical district or other restricted use area?
• Are there any environmental issues for this site?

Working through this example - Presently on KCREA there are 239 listings for raw land in Jefferson County.   Of these only 49 are between 4 and 7 acres.    The church would like to be in a residential area, and about half of these are in Industrial Parks.   That leaves us with about 25 properties.    Of these properties, approximately half will not have the required infrastructure (usually the big issue is sewage capacity).   So now we are down to about 12 sites.   By the time we draw a radius around the church, we may only have 2 or 3 sites that could even work for their criteria.

Many people are surprised when they realize how few options will actually exist when everything is taken into account.  

Have a great day.   Be sure to let me know if I can be of help in your real estate needs.

David

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

DMcCoy@ccre.biz
(502) 379-6005

Land Sales

Not too long ago, you could make a decent living specializing in land sales.   That changed about 3 years ago with the beginning of our current recession.    At that time, I had one tract under contract with a well known home supply retailer and several other properties next to a quarry under contract with a large industrial company.    All were supposed to close within a month and then suddenly they were all wiped out in just a few weeks time.   

The residential real estate bust, the financial market meltdown and the shock waves that followed effectively ended development.    Now three years later, many of the developers went belly up and most of the financing available for new projects dried up.   The obvious result is that the demand for land has declined tremendously.    Accordingly, prices for land are roughly 40% less than they were 3 years ago.  

Presently on KCREA, there are approximately 600 listings for land.   As of last Friday, (March 25) KCREA only reported 3 parcels of land having sold in the first 3 months of 2011.     At that rate, it would take 50 years for all of these parcels to sell.  

When development was rampant, many developers were willing to buy land that needed rezoning, or needed to wait on sewers or other infrastructure.   That is no longer the case.    If a developer is lucky enough to have a project in the works, they want land that they can use immediately not something that would be available in a year or so.  With that in mind, at least for now, I am not taking new land listing on properties that would need rezoning or that do not already have basic infrastructure in place.

Recently, I called on several companies I have dealt with and asked about their development plans for 2011.   Almost all of them told me that they were still waiting to see if the economy would improve more before commiting to new projects.     Still, I cant help but feel that this is about to turn around.   Many companies have been sitting on the sidelines for 3 years now.   At some point, they need to either begin development again or consider shutting down.  

The thing to take away here is that if you have commercial land you would like to sell, you need to talk to someone who understands the market to be successful.   The commercial land market is a very difficult market still and unless you have 50 years to wait to sell your property, you need to do everything possible to make that property stand out in the top 1% of all the land available for sale.

Have a great day all.  

David

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

Land in Condo Associations

Condo developments are often developed in stages with new units added as the initial units are sold or leased.    Developers of Condos sometimes reserve land for later development.    This land is likely to be included in the initial master deed of the condo development.   The condo association typically owns all of the land and structures in a the development while the condo owners only own the interior space of the condo.    This makes the ownership of undeveloped land a little murky.   

When buying undeveloped land from a condo association, you may actually be buying the "development rights" to that land rather than the land itself.   Normally, the condo association would have the right to review and approve the new structure and when it was complete, the condo association may well own the land and the structure, while the "purchaser" would actually own only the condos therein.   

That is not necessarily a bad thing.   The condo association would in all likelihood have the responsibility to maintain the exterior of the structure and perhaps some of the mechanicals and common area.   The condo owner would have to abide by the condo rules and regulations and would have to pay association dues.  

If you decide to purchase undeveloped land in a condo association, it would be wise to have a real estate attorney review the situation.   The important thing is to be sure that you understand what you are buying and the implications and costs of doing so.  

Have a great day, all.   Let me know if I can help you with your real estate needs.

David

David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Parkway
Louisville, KY  40299
ofc:  (502) 379-6005

dmccoy@ccre.biz

You can also find me on Twitter @mccoydw