For the last several weeks I have been working on a report for a client detailing the state of the Louisville Industrial Real Estate market. Most of us have at least anecdotal evidence that things there are getting better but it was really amazing to gather some hard facts.
Last year (2014) marked the return of spec Industrial projects. The Louisville market added more than 2 Million square feet of industrial space and the overall vacancy rate still declined. Some estimates claim that the vacancy rate for Louisville industrial space is below 4%. There were 9 industrial leases signed for 200,000 SF or more totaling nearly 2.7 Million SF.
According to the Federal Reserve's Burgundy Book for the Louisville region, the two main factors for this are the improvement in the job picture and decline in fuel prices. Jobs, of course will vary with the economic conditions. The decline in fuel prices however seems to be largely due to the fracking revolution. This revolution is leading the US to energy independence perhaps as soon as one year from now. And it is fundamentally changing the world's energy market as the US becomes the world's number one energy producer. This bodes very well for the US economy in general and especially benefits two key industries of manufacturing and transportation locally.
The key players in our industrial market are all bullish on their prospects. Ford expects car sales to continue to increase. UPS experienced 8% growth last year and expects things to continue to improve. Electrolux saw an increase in appliance sales in North America of 6% last year and expects the demand to increase as the North American residential real estate market continues it's comeback.
In short, things are looking good and it looks like we can expect this to continue for a while.
It's really nice to be able to share some good news.
Have a great day!
David
David W. McCoy
Vice President
Commonwealth Commercial Real Estate
dmccoy@ccre.biz
BTW - I am licensed in KY and IN. I specialize in commercial properties and handle Office, Industrial, Land, Investment and Retail properties. I work with buyers, sellers, landlords, tenants and investors. I also work with international real estate and internationals looking for real estate. Please let me know if I can help you.
Showing posts with label market stats. Show all posts
Showing posts with label market stats. Show all posts
Friday, March 27, 2015
Monday, May 13, 2013
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
Thursday, January 19, 2012
Louisville 2011 Retail Real Estate Review
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
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
Wednesday, January 18, 2012
Louisville 2011 Industrial Review
I'm continuing my review of Louisville Commercial Real Estate for 2011. Today, I am looking at the Industrial Market. Here is what I found -
The Numbers -
According to KCREA (Kentucky Commercial Real Estate Alliance), the Louisville metro area had 127 Leases for approximately 1,127,191 SF of Industrial space. The median lease space was 3924 SF while the average lease was for 41,748 SF. The largest Industrial Lease reported for 2011 was 162,000 SF while the smallest lease reported was 475 SF.
Regarding Industrial Sales, KCREA reported 38 Industrial Buildings sold in 2011 consisting of 1,635,993 SF selling for $37,115,500. The median building size was 24,960 SF while the median transaction size was $487,000. The average selling price per square foot was $22.96 and the average building size was 42,535. (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 Industrial sales transaction was a 248,400 SF Building in Louisville which sold for $7,760,000. The smallest unit sold was a 2,400 SF unit which sold for $130,000.
What this says to me -
At 127 leases and 38 sales for the year, we are seeing about 2.4 leases and 0.73 sales per week. Half of the leases are for less than 3,924 SF. When the average space leased exceeds the median by such a large margin, this screams that there are very few large transactions in the market place. The vast majority of the transactions are very small spaces. While information on the term of the leases is not provided in the KCREA stats, conversation with other brokers leads me to believe that we are continuing to have shorter term leases.
For Industrial 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 top 5 sales transactions amounted to more than half of the total dollar volume of the reported sales.
Recommendations -
Louisville has had a fair amount of good economic news in 2011, with expansions planned at Ford and GE, among others. As these lines begin to come on-line and as suppliers and other companies also begin to expand, it looks as though things in Louisville will continue to improve.
My recommendations remain the same. Like the Office, I would say that things are looking better - number of calls and showing are up and unemployment is improving. Also, while I cannot quantify this, I am beginning to see a willingness of companies to consider longer terms in their leasing.
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
The Numbers -
According to KCREA (Kentucky Commercial Real Estate Alliance), the Louisville metro area had 127 Leases for approximately 1,127,191 SF of Industrial space. The median lease space was 3924 SF while the average lease was for 41,748 SF. The largest Industrial Lease reported for 2011 was 162,000 SF while the smallest lease reported was 475 SF.
Regarding Industrial Sales, KCREA reported 38 Industrial Buildings sold in 2011 consisting of 1,635,993 SF selling for $37,115,500. The median building size was 24,960 SF while the median transaction size was $487,000. The average selling price per square foot was $22.96 and the average building size was 42,535. (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 Industrial sales transaction was a 248,400 SF Building in Louisville which sold for $7,760,000. The smallest unit sold was a 2,400 SF unit which sold for $130,000.
What this says to me -
At 127 leases and 38 sales for the year, we are seeing about 2.4 leases and 0.73 sales per week. Half of the leases are for less than 3,924 SF. When the average space leased exceeds the median by such a large margin, this screams that there are very few large transactions in the market place. The vast majority of the transactions are very small spaces. While information on the term of the leases is not provided in the KCREA stats, conversation with other brokers leads me to believe that we are continuing to have shorter term leases.
For Industrial 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 top 5 sales transactions amounted to more than half of the total dollar volume of the reported sales.
Recommendations -
Louisville has had a fair amount of good economic news in 2011, with expansions planned at Ford and GE, among others. As these lines begin to come on-line and as suppliers and other companies also begin to expand, it looks as though things in Louisville will continue to improve.
My recommendations remain the same. Like the Office, I would say that things are looking better - number of calls and showing are up and unemployment is improving. Also, while I cannot quantify this, I am beginning to see a willingness of companies to consider longer terms in their leasing.
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
Tuesday, January 17, 2012
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
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
Monday, January 16, 2012
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
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
Wednesday, December 14, 2011
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.
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
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.
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
Thursday, November 3, 2011
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:
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
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
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
Tuesday, October 11, 2011
Louisville Commercial Real Estate 3rd Qtr 2011 Review of Leasing
In my previous post, I examined YTD Commercial Real Estate Sales through 3rd Quarter 2011. In this post, I will examine YTD Commercial Real Estate Leasing.
The Numbers
According to KCREA (Kentucky Commercial Real Estate Association), 299 total leases were reported from January 1, 2011 through September 30. Because of privacy concerns, the dollar amount of these leases is normally not available. This equated to an average of 7.7 leases signed per week.
Leasing Data breaks down as follows: (note: figures are 2011 YTD figures through 3rd Qtr)
(side note on dollar value of leases: From existing data, it is difficult to estimate the dollar amout of leasing activity. If we were to use the average asking price and the square feet leased, we could come up with an estimate of approximately $4.3 Million for Office, $2.7 Million for Industrial, and $3.2 Million for Retail. However being based on asking prices, you would have to assume these figures would be high. Also, this estimate would assume basically 1 year leases. In today's market, several leases may be one year but historically, they tend to be longer and information on KCREA is not complete enough to give us this insight.)
What this means
The thing that sticks out to me is the size of the leased area. In every category, there is a big discrepancy between the average size leased and the median amount of space leased. This indicates that each category has a few large transactions that comprise the lion's share of the activity. Looking at the median numbers, we see that more than half of all of the Industrial transactions were for less than 4,000 SF; more than half of the Office transactions were for less than 1,700 SF and finally more than half of the Retail transactions were for less than 2,000 SF. These are very small transactions especially when we consider that the transactions involving smaller spaces also typically involve shorter lease terms.
As with Sales, the other important thing to consider here is the amount of inventory. Presently on KCREA, there are approximately 11,000 listings. (this includes both lease and sales listings.) Inventory has increased significantly over the last couple of years. As with sales, with only 299 leases recorded YTD, it would take years to clear out all of the existing inventory. The successful Landlords will recognize that they MUST do everything possible to be in the top 5% to 10% of listed properties, in condition and price.
Crystal Ball
If we were to base our predictions for the future on the figures we have seen to date, one would expect another difficult year in Commercial Real Estate leasing. My experience and word on the street however may indicate that we will have some positive news in the works.
If you would like some help divining the future of your commercial real estate or if you need help finding some property to lease or buy, I would love to help. Give me a call or shoot me an e-mail.
By the way, I am sure that my managing broker would appreciate me clarifying that the opinions expressed here are my own and do not necessarily reflect those of Commonwealth Commercial Real Estate, its staff, employees, agents, or brokers (other than me, of course). If you have another opinion and would like to express it or ask a question, please feel free to post a comment. I welcome other points of view, although I do not welcome inappropriate comments or language. In those cases, I reserve the right to delete them.
Hope you have a great day.
David
David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY 40299
The Numbers
According to KCREA (Kentucky Commercial Real Estate Association), 299 total leases were reported from January 1, 2011 through September 30. Because of privacy concerns, the dollar amount of these leases is normally not available. This equated to an average of 7.7 leases signed per week.
Leasing Data breaks down as follows: (note: figures are 2011 YTD figures through 3rd Qtr)
- Industrial Leases: 98 transactions totaling 779,929 SF; Avg leased area 7958 SF; Median leased area 3,862 SF; Avg asking rate for Industrial Space $3.44 per SF
- Office Leases: 104 transactions totaling 266,374 SF; Avg leased area 2,561 SF; Median leased area 1,640 SF; Avg asking rate for Office Space $16.12 per SF
- Retail Leases: 96 transactions totalign 324,533 SF; Avg leased area 3,381 SF; Median leased area 1,950 SF; Avg asking rate for Retail Space $9.82 per SF
(side note on dollar value of leases: From existing data, it is difficult to estimate the dollar amout of leasing activity. If we were to use the average asking price and the square feet leased, we could come up with an estimate of approximately $4.3 Million for Office, $2.7 Million for Industrial, and $3.2 Million for Retail. However being based on asking prices, you would have to assume these figures would be high. Also, this estimate would assume basically 1 year leases. In today's market, several leases may be one year but historically, they tend to be longer and information on KCREA is not complete enough to give us this insight.)
What this means
The thing that sticks out to me is the size of the leased area. In every category, there is a big discrepancy between the average size leased and the median amount of space leased. This indicates that each category has a few large transactions that comprise the lion's share of the activity. Looking at the median numbers, we see that more than half of all of the Industrial transactions were for less than 4,000 SF; more than half of the Office transactions were for less than 1,700 SF and finally more than half of the Retail transactions were for less than 2,000 SF. These are very small transactions especially when we consider that the transactions involving smaller spaces also typically involve shorter lease terms.
As with Sales, the other important thing to consider here is the amount of inventory. Presently on KCREA, there are approximately 11,000 listings. (this includes both lease and sales listings.) Inventory has increased significantly over the last couple of years. As with sales, with only 299 leases recorded YTD, it would take years to clear out all of the existing inventory. The successful Landlords will recognize that they MUST do everything possible to be in the top 5% to 10% of listed properties, in condition and price.
Crystal Ball
If we were to base our predictions for the future on the figures we have seen to date, one would expect another difficult year in Commercial Real Estate leasing. My experience and word on the street however may indicate that we will have some positive news in the works.
- Office - For the first time in many years, many of the larger Tenants have been looking around for Office space. These larger leases can take quite a while to finalize but several deals are already rumored to be in their final stages. These should begin to show up in the figures in the next 6 months or so.
- Industrial - Industrial Leasing has been fluctuating somewhat but if manufacturing continues to recover, we can expect this to improve as well. The Industrial sector should benefit tremendously as Ford and GE add several thousand new manufacturing jobs they have announced.
- Retail - With retail, I have been seeing some of the retailers beginning to look around again and while some leasing seems to be occurring, activity in this sector seems to be trailing Office and Industrial. Most of the activity seems to be smaller retailers with very few big box deals being done.
If you would like some help divining the future of your commercial real estate or if you need help finding some property to lease or buy, I would love to help. Give me a call or shoot me an e-mail.
By the way, I am sure that my managing broker would appreciate me clarifying that the opinions expressed here are my own and do not necessarily reflect those of Commonwealth Commercial Real Estate, its staff, employees, agents, or brokers (other than me, of course). If you have another opinion and would like to express it or ask a question, please feel free to post a comment. I welcome other points of view, although I do not welcome inappropriate comments or language. In those cases, I reserve the right to delete them.
Hope you have a great day.
David
David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY 40299
Thursday, October 6, 2011
Louisville Commercial Real Estate 3rd Quarter Review of Sales
With the 3rd Quarter of 2011 behind us, I decided to do some market analysis of the Commercial Real Estate market here in Louisville. Here is what I found.
The Numbers
According to KCREA (Kentucky Commercial Real Estate Association), 161 total sales were reported from January 1, 2011 through September 30, 2011. These sales had a dollar amount of approximately $75,923,496. Average transaction size was about $471,575. This translates into approximately 4.1 sales transactions per week. (note about numbers: Obviously duplicate transactions, transactions with incomplete data and transactions with obvious errors were omitted when calculating these figures.)
Sales Data breaks down as follows: (note: figures are 2011 YTD figures through 3rd Qtr)
The striking thing to note is the prices. Without a frame of reference, this may not mean much but the prices are down in almost every category. Comparing the sales prices to the asking prices gives a better picture of the market at large. Industrial prices while low seem to have stabilized with asking prices essentially equal to the sales prices being paid on average. Sales prices on Office and Retail however are off considerably from asking prices. More than likely this indicates that most of the properties being sold are distressed properties. Land is a slightly more complicated beast but with an average sales price of around $10,000 per acre, this indicates that there is still very little development going on. Land which sells in this price range typically is more rural or agricultural and more than likely does not have commercial zoning, utilities to site or other infrastructure necessary for development.
The other part to consider here is the amount of unsold inventory. Presently on KCREA there are nearly 11,000 listings. (this includes both lease and sale listings). This inventory has increased tremendously over the last couple of years. With only 161 sales this year, you can see that it would take years to eliminate all of the existing inventory. The best advice continues to be that if you are selling property, you HAVE to do everything possible to have it in the top 5% of listed properties, in condition and in price.
Let me know if you have any questions about this article or about commercial real estate.
Have a great day!
David
David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY 40299
The Numbers
According to KCREA (Kentucky Commercial Real Estate Association), 161 total sales were reported from January 1, 2011 through September 30, 2011. These sales had a dollar amount of approximately $75,923,496. Average transaction size was about $471,575. This translates into approximately 4.1 sales transactions per week. (note about numbers: Obviously duplicate transactions, transactions with incomplete data and transactions with obvious errors were omitted when calculating these figures.)
Sales Data breaks down as follows: (note: figures are 2011 YTD figures through 3rd Qtr)
- Industrial Sales 31 transactions totaling $34,488,500; Avg building size 48,749 SF; Avg Sale Amount $1,112,532; Avg Sales Price / SF $22.82 / SF; Avg asking price $22.18 / SF
- Multifamily Sales - 22 transactions totaling $5,723,600; Avg building size 14,004 SF; Avg Sale Amount $260,164; Avg Sales Price / SF $18.58; Avg asking price $40.66 / SF
- Office Sales - 33 transactions totaling $13,482,000; Avg building size 8,937 SF; Avg Sale Amount $408,545; Avg Sales Price / SF $45.71; Avg asking price $78.34 / SF
- Retail / Shopping Ctr Sales - 42 transactions totaling $12,162,750; Avg building size 5,370 SF; Avg Sale Amount $289,589; Avg Sales Price / SF $53.93; Avg askign price $70.40 / SF
- Special Purpose Sales - 11 transactions totaling $2,245,100; Avg Sale Amount $204,100
- Vacant Land Sales - 22 transactions totaling $7,821,546; Avg tract size 34.96 acres; Avg Sale Amount $355,525; Avg price paid per acre $10,169 / acre; Avg asking price $42,689 / acre.
The striking thing to note is the prices. Without a frame of reference, this may not mean much but the prices are down in almost every category. Comparing the sales prices to the asking prices gives a better picture of the market at large. Industrial prices while low seem to have stabilized with asking prices essentially equal to the sales prices being paid on average. Sales prices on Office and Retail however are off considerably from asking prices. More than likely this indicates that most of the properties being sold are distressed properties. Land is a slightly more complicated beast but with an average sales price of around $10,000 per acre, this indicates that there is still very little development going on. Land which sells in this price range typically is more rural or agricultural and more than likely does not have commercial zoning, utilities to site or other infrastructure necessary for development.
The other part to consider here is the amount of unsold inventory. Presently on KCREA there are nearly 11,000 listings. (this includes both lease and sale listings). This inventory has increased tremendously over the last couple of years. With only 161 sales this year, you can see that it would take years to eliminate all of the existing inventory. The best advice continues to be that if you are selling property, you HAVE to do everything possible to have it in the top 5% of listed properties, in condition and in price.
Let me know if you have any questions about this article or about commercial real estate.
Have a great day!
David
David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY 40299
Wednesday, June 15, 2011
Louisville Market Activity
My experience for the year is that overall market activity for commercial real estate here in Louisville has been uneven. I have had several runs of 2 or 3 weeks when things were very busy followed by 2 or 3 weeks where appointments were canceled and people would not return phone calls.
Lately, I have been having another busy streak. One listing I have has had several proposals and requests for proposals. Another listing has a lease presently under negotiation. A tenant rep client of mine is trying to negotiate a lease with a landlord. AND another listing of mine has two people both promising that they intend to submit purchase offers (although we have been waiting a week for both of these so far)
Persistance is very important to getting a transaction closed. Two or three years ago, this amount of activity would have seemed like a sure bet but in today's uncertain economy, prospects on both sides of the transaction will suddenly unexplicably disappear.
Especially now it is important to not count your chickens before they hatch. Continue to pursue all options until your deal is signed.
Have a great (albeit rainy) day and let me know if you need help with your real estate needs.
David
David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY 40299
Lately, I have been having another busy streak. One listing I have has had several proposals and requests for proposals. Another listing has a lease presently under negotiation. A tenant rep client of mine is trying to negotiate a lease with a landlord. AND another listing of mine has two people both promising that they intend to submit purchase offers (although we have been waiting a week for both of these so far)
Persistance is very important to getting a transaction closed. Two or three years ago, this amount of activity would have seemed like a sure bet but in today's uncertain economy, prospects on both sides of the transaction will suddenly unexplicably disappear.
Especially now it is important to not count your chickens before they hatch. Continue to pursue all options until your deal is signed.
Have a great (albeit rainy) day and let me know if you need help with your real estate needs.
David
David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY 40299
Friday, April 22, 2011
Bluegrass Industrial Park
I am working on some market research for a client with some property in Bluegrass Industrial Park, in Jeffersontown, KY. I thought this information might be useful and/or interesting to some.
Bluegrass Industrial Park
Bluegrass Industrial Park comprised approximately 1800 acres and is home to approxmiately 850 businesses with approximately 38,000 employees. If you are unfamiliar with the Park, it is located adjacent to I-64 with two interstate exits (Hurstbourne Pkwy and Blankenbaker Pkwy).
Sales Data
Presently (as of April 21, 2011) there are 27 Industrial Properties listed for sale on KCREA (Kentucky Commercial Real Estate Alliance). Since January 1 of 2010, 3 industrial properties have sold in the park. All were smaller industrial properties; the smallest being 8,400 SF while the largest was 16,693 SF. The average size was 12,028 SF. The average sale price per square foot was $33.95.
Leasing Data
Presently (as of April 21, 2011) there are 79 Industrial Properties listed for lease on KCREA. Since April 1, 2010 (approximately 1 year ago) 54 leases were reported on KCREA. The average size of the lease was 8,217 SF however the median size of the leases was 2,700 SF. Only 6 leases exceeded 10,000 SF.
Analysis
Although we are seeing some activity with people looking at commercial real estate, the experience of the last year would indicate that we need to remain cautious. With some 27 properties presently listed for sale and only 3 sales reported in the last 16 months, the expected time to sell these properties would be about 12 years.
The leasing picture is somewhat more promising. With 79 listed properties and a reported 54 leases last year, you would expect to lease these properties in about a year and a half. However, you need to take this news with a grain of salt. A closer look reveals that half of these leases were for space 2,700 SF or less and nearly 90% were for less than 10,000 SF. So smaller and shorter leases are the norm.
Things are different for spaces of 10,000 SF or more. Presently, KCREA lists 23 industrial properties with at least 10,000 for lease. Given that in the last year, 6 leases were reported in this size range, you would expect these properties to lease in about 4 years.
Conclusion
Although there is evidence of improvement in the economy and increased interest, data suggests that it is still very much a buyers market. Successful landlords will have their properties in top condition and priced competitively.
Ending on a personal note, it looks like it is going to be a rainy weekend and it looks as though the river will be flooding. Stay dry and have a great weekend.
Don't forget to let me know if you need any help with commercial real estate.
David
David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY 40299
Bluegrass Industrial Park
Bluegrass Industrial Park comprised approximately 1800 acres and is home to approxmiately 850 businesses with approximately 38,000 employees. If you are unfamiliar with the Park, it is located adjacent to I-64 with two interstate exits (Hurstbourne Pkwy and Blankenbaker Pkwy).
Sales Data
Presently (as of April 21, 2011) there are 27 Industrial Properties listed for sale on KCREA (Kentucky Commercial Real Estate Alliance). Since January 1 of 2010, 3 industrial properties have sold in the park. All were smaller industrial properties; the smallest being 8,400 SF while the largest was 16,693 SF. The average size was 12,028 SF. The average sale price per square foot was $33.95.
Leasing Data
Presently (as of April 21, 2011) there are 79 Industrial Properties listed for lease on KCREA. Since April 1, 2010 (approximately 1 year ago) 54 leases were reported on KCREA. The average size of the lease was 8,217 SF however the median size of the leases was 2,700 SF. Only 6 leases exceeded 10,000 SF.
Analysis
Although we are seeing some activity with people looking at commercial real estate, the experience of the last year would indicate that we need to remain cautious. With some 27 properties presently listed for sale and only 3 sales reported in the last 16 months, the expected time to sell these properties would be about 12 years.
The leasing picture is somewhat more promising. With 79 listed properties and a reported 54 leases last year, you would expect to lease these properties in about a year and a half. However, you need to take this news with a grain of salt. A closer look reveals that half of these leases were for space 2,700 SF or less and nearly 90% were for less than 10,000 SF. So smaller and shorter leases are the norm.
Things are different for spaces of 10,000 SF or more. Presently, KCREA lists 23 industrial properties with at least 10,000 for lease. Given that in the last year, 6 leases were reported in this size range, you would expect these properties to lease in about 4 years.
Conclusion
Although there is evidence of improvement in the economy and increased interest, data suggests that it is still very much a buyers market. Successful landlords will have their properties in top condition and priced competitively.
Ending on a personal note, it looks like it is going to be a rainy weekend and it looks as though the river will be flooding. Stay dry and have a great weekend.
Don't forget to let me know if you need any help with commercial real estate.
David
David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY 40299
Monday, March 28, 2011
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
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
Friday, March 25, 2011
KCREA Commercial Sales Snapshot
I spent some time this afternoon mining the KCREA data base for information on Commercial Real Estate Sales. KCREA (Kentucky Commercial Real Estate Alliance) provides our Commercial Information Exchange which is similar to the residential MLS.
So far this year, there have been 34 sales reported on KCREA totaling $14,572,400. (About 11 sales per month.) Doing the math for you, the average sale was $428,600. However, the median sale price was $182,500. In other words, although the average sale price was $428,600, most of the properties sold for far less than this. This is due in part to the fact that the top 4 sales totaled $4,420,000, nearly a third of the dollar amount of all sales YTD.
The recorded sales included 7 multifamily properties, 10 retail properties, 3 land properties,5 industrial properties, 7 office properties and 2 special purpose properties. Presently on KCREA there are 86 multifamily listings, 309 retail listings, 600 land listings, 219 industrial listings, 299 office listings, 67 special purpose listings, 15 farm listings, 23 shopping center listings, and 5 hospitality listings.
What you can take away from this is that overall sales are down from last year. (last year averaged more than 4 sales per week vs 2,8 sales per week YTD). But if you are selling, you probably are happiest if you are selling a multifamiliy property where more than 8% of the listed properties sold in the first quarter. You are probably saddest if you have commercial land on the market where only 0.5% of the listed properties sold in the first quarter.
Final conclusion is that we are continuing a buyer's market with inventories growing and number of sales slowing. The successful seller will act agressively in this market to make sure that there property is in the top 5% of all comparable properties in price and condition.
I am interested in your questions and comments. Let me know if I can help with your real estate needs.
Thanks all and have a great day. Good luck to all those running the Papa John's 10 mile run in the morning!
David
David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY 40299
So far this year, there have been 34 sales reported on KCREA totaling $14,572,400. (About 11 sales per month.) Doing the math for you, the average sale was $428,600. However, the median sale price was $182,500. In other words, although the average sale price was $428,600, most of the properties sold for far less than this. This is due in part to the fact that the top 4 sales totaled $4,420,000, nearly a third of the dollar amount of all sales YTD.
The recorded sales included 7 multifamily properties, 10 retail properties, 3 land properties,5 industrial properties, 7 office properties and 2 special purpose properties. Presently on KCREA there are 86 multifamily listings, 309 retail listings, 600 land listings, 219 industrial listings, 299 office listings, 67 special purpose listings, 15 farm listings, 23 shopping center listings, and 5 hospitality listings.
What you can take away from this is that overall sales are down from last year. (last year averaged more than 4 sales per week vs 2,8 sales per week YTD). But if you are selling, you probably are happiest if you are selling a multifamiliy property where more than 8% of the listed properties sold in the first quarter. You are probably saddest if you have commercial land on the market where only 0.5% of the listed properties sold in the first quarter.
Final conclusion is that we are continuing a buyer's market with inventories growing and number of sales slowing. The successful seller will act agressively in this market to make sure that there property is in the top 5% of all comparable properties in price and condition.
I am interested in your questions and comments. Let me know if I can help with your real estate needs.
Thanks all and have a great day. Good luck to all those running the Papa John's 10 mile run in the morning!
David
David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY 40299
Tuesday, March 8, 2011
Louisville Office Stats
KCREA (Kentucky Commercial Real Estate Alliance) has added some new features with statistics from their data. Some of the information is data I used to mine periodically, which is nice because it can be a little easier to get. Last week I decided to check it out a little and printed a Summary of Louisville and Jefferson County Office activity. (for purposes of comparision, the report was printed on March 1, 2011.)
In the previous month, 7 properties were leased and 2 were sold. Average asking rate to lease office space was $15.40 / SF but actual reported lease rates were $9.14 / SF. Average asking price to sell office space is $80.82 / SF but actual reported sales averaged $65.66 / SF. Properties that sold averaged 438 days on the market.
Of course you have to be careful with statistics. Given that there are very few transactions, it may not be wise to rely too heavily on the averages. In my mind the most telling figures are the number of transactions themselves. Both Sales and Leasing numbers are down significantly and while I might not put too much emphasis on the actual rates, I think it is telling that the information we do have indicates steep discounts from asking price on deals that were done.
Happy Mardi Gras, everyone. Hope you get some Red Beans and Rice, some beignets, and maybe even a Hurricane to celebrate.
David
David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY 40299
In the previous month, 7 properties were leased and 2 were sold. Average asking rate to lease office space was $15.40 / SF but actual reported lease rates were $9.14 / SF. Average asking price to sell office space is $80.82 / SF but actual reported sales averaged $65.66 / SF. Properties that sold averaged 438 days on the market.
Of course you have to be careful with statistics. Given that there are very few transactions, it may not be wise to rely too heavily on the averages. In my mind the most telling figures are the number of transactions themselves. Both Sales and Leasing numbers are down significantly and while I might not put too much emphasis on the actual rates, I think it is telling that the information we do have indicates steep discounts from asking price on deals that were done.
Happy Mardi Gras, everyone. Hope you get some Red Beans and Rice, some beignets, and maybe even a Hurricane to celebrate.
David
David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY 40299
Tuesday, February 8, 2011
KCREA Facts for the Day
Louisville Commercial Real Estate Market Facts for the day.
KCREA (Kentucky Commercial Real Estate Alliance) which has our Commercial Information Exchange (somewhat equivalent to the MLS of residential real estate) reports a total of 3158 listed properties today. 1496 are sale listings and 1662 are lease listings. In the last 7 days, KCREA reported 8 sale transactions and 11 lease transactions.
For comparison, total KCREA listings very consistantly averaged 3000 for most of 2009 and 2010. Hence total listings are up by a little more than 5%. (Sales listing are up nearly 7% while Lease listing are up around 4%)
The total number of transactions is very healthy relative to the last couple of years. At the rates of last week, you would expect current inventory levels to last 166 weeks (about 3.2 years). (Sales levels would indicate a turn over of 187 weeks (or 3.6 years) while Lease levels would indicate a turn over of 151 weeks (or 2.9 years)).
All in all an interesting week. We can hope this trend continues.
If you need help with commercial real estate, please give me a call. I would love to help.
Thanks, all. Have a great day!
David
David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY 40299
KCREA (Kentucky Commercial Real Estate Alliance) which has our Commercial Information Exchange (somewhat equivalent to the MLS of residential real estate) reports a total of 3158 listed properties today. 1496 are sale listings and 1662 are lease listings. In the last 7 days, KCREA reported 8 sale transactions and 11 lease transactions.
For comparison, total KCREA listings very consistantly averaged 3000 for most of 2009 and 2010. Hence total listings are up by a little more than 5%. (Sales listing are up nearly 7% while Lease listing are up around 4%)
The total number of transactions is very healthy relative to the last couple of years. At the rates of last week, you would expect current inventory levels to last 166 weeks (about 3.2 years). (Sales levels would indicate a turn over of 187 weeks (or 3.6 years) while Lease levels would indicate a turn over of 151 weeks (or 2.9 years)).
All in all an interesting week. We can hope this trend continues.
If you need help with commercial real estate, please give me a call. I would love to help.
Thanks, all. Have a great day!
David
David W. McCoy
Associate Broker
Commonwealth Commercial Real Estate
10444 Bluegrass Pkwy
Louisville, KY 40299
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