The commercial real estate market is continuing to improve in Kentucky’s second largest city Lexington, according to the results of the NAI Isaac Commercial Properties’ Report.
The semi-annual market assessment revealed that vacancy rates were lower in all categories. The report included figures for suburban and downtown office space, as well as industrial and retail properties.
The retail market’s vacancy rate is currently 5.6 per cent, having dropped from 6.1 per cent in July 2012. The Fayette Mall has a vacancy rate of less than 0.2 per cent. According to the report, the retail category also saw absorption at The Mall at Lexington Green.
Vacancy rates declined in the downtown office category to 14.2 per cent, representing a drop of 6 per cent. The suburban office vacancy rate dropped by 6 per cent to 13.1 per cent.
Jeff Stidham, the president of Stidham Commercial Partners commented that the lower vacancy rates in office space were good news for the local economy.
“We’re blessed here. Typically, office is still one of the struggling asset classes nationwide.
“Many, many markets, most markets, are still suffering from a very substantial oversupply of office,” he said.
Industrial vacancy rates fell due to higher occupancy levels in “bulk warehouse properties”. According to the report, vacancy rates were higher for properties that were dedicated to manufacturing and distribution, as well as high tech, research and development.
Local developer Tim Haymaker commented that the market is lacking in some areas. He pointed out that he has a client with very specific needs (75,000-140,000 sq ft) and this type of industrial property doesn’t exist in the city. Anything above 75,000 square feet is very difficult to find as stand-alone industrial space.
The survey results are compiled from information submitted to NAI Isaac and include 487 commercial properties with approximately 32 million square feet of space.
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