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Commercial Real Estate Louisville - COMMERCIAL ......2019/12/10 · Louisville area dropped from...
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MARKET INSIGHT LOUISVILLE, KENTUCKY MULTIFAMILY REPORT | THIRD QUARTER 2019 CUSHMAN & WAKEFIELD | COMMERCIAL KENTUCKY LOUISVILLE MULTIFAMILY RESEARCH The Cushman & Wakefield | Commercial Kentucky Multifamily Research Team, along with Integra Realty Research, provides in-depth coverage of the Louisville Metropolitan Statistical Area. In addition to analyzing multifamily rent and sale trends, these reports examine employment data, key economic announcements, and development pipeline news. RESEARCH & SALES TEAM IN THIS EDITION CRAIG COLLINS SENIOR DIRECTOR [email protected] MIKE KEMETHER VICE CHAIR, MULTIFAMILY ADVISORY GROUP [email protected]
Transcript of Commercial Real Estate Louisville - COMMERCIAL ......2019/12/10 · Louisville area dropped from...
MARKET INSIGHTLOUISVILLE, KENTUCKY MULTIFAMILY REPORT | THIRD QUARTER 2019
CUSHMAN & WAKEFIELD | COMMERCIAL KENTUCKY LOUISVILLE MULTIFAMILY RESEARCH
The Cushman & Wakefield | Commercial Kentucky Multifamily Research Team, along with Integra Realty Research, provides in-depth coverage of the Louisville Metropolitan Statistical Area. In addition to analyzing multifamily rent and sale trends, these reports examine employment data, key economic announcements, and development pipeline news.
RESEARCH & SALES TEAM
IN THIS EDITION
CRAIG COLLINSSENIOR [email protected]
MIKE KEMETHERVICE CHAIR, MULTIFAMILY ADVISORY [email protected]
1LOUI SVI L L E , KEN T UCKYMARKET INSIGHTThird Quarter 2019
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The following are select announcements from third quarter 2019:
Average Q3 employment increased by 7,395 jobs.
Average Q1 unemployment decreased to 3.3%.
1.1 -500% Y O Y B P S Y O Y
ECONOMIC EXPANSION
JOB GROWTH & UNEMPLOYMENT RATE
Kentuckiana Curb Company, which makes HVAC products, plans to expand in Louisville with a $50 investment expected to create up to 400 new full-time positions.
UPS is making another huge investment in Louisville that will be spread across multiple projects costing in excess of $750M. Those projects are expected to create 1,000 new jobs paying an average of $70/Hr. including benefits
With a $4.3M investment, Ernst & Young is expanding their downtown office and is planning to hire 60 new employees. That is in addition to the 125 new hires already committed there by Ernst & Young.
Fast-growing Louisville technology company, El Toro, LLC plans to add as many as 400 new employees over the next five years, taking its total staff to 500 or more. This news came as part of an announcement regarding the company’s planned headquarters expansion at the new Gateway to NuLu technology hub, which could cost of to $11.1M.
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As of the end of September 2019, unemployment rates in the Louisville area dropped from 3.8% (as of Q1 2019) to 3.3%. Louisville’s unemployment rate is below the national average, which was 3.5% for the same period.
EMPLOYMENT & UNEMPLOYMENT TRENDS
LOUISVILLE JOB GROWTH TRENDS
LOUISVILLE METRO AREA
Q3 2018 Q1 2019 Q3 2019
EMPLOYMENT (% Change) 0.0% 1.0% 0.0%
UNEMPLOYMENT RATE (%) 3.7% 3.8% 3.3%
Source: Bureau of Labor Statistics
EMPLOYMENT IN THOUSANDS
Source: Cushman & Wakefield | Commercial Kentucky
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2LOUI SVI L L E , KEN T UCKYMARKET INSIGHTThird Quarter 2019
964 units were completed in the last 12 months, and over 4,800 units are currently under construction in the Louisville Metro area.
Additionally, nearly 6,300 units are planned throughout the Metro area, with three submarkets planning over 1,000 units each. Those submarkets are Area 2 (with 1,656 units planned), Area 8 (with just over 1,000 units planned) and Area 5 (with nearly 1,200 units planned).
The MSA population is projected to grow by 18% between 2010 and 2040. The projected gain of households is 21% for the same period.
The following are Cushman & Wakefield’s projections over the near term:
DEVELOPMENT / INVENTORY
DEMOGRAPHIC FUNDAMENTALS
MULTIFAMILY FORECAST
VACANCYREN TS P IP EL INE % G ROWTH
Forecast is 12-month outlook
2000: 1,025,5982010: 1,235,7082016: 1,293,9532021: 1,320,600
Current%: 32.0Current #: 178,775
Current: $57,279
POPULATION
PERCENT RENTER
HOUSEHOLDS
MEDIAN HOUSEHOLD
INCOME
SUBMARKET OVERVIEW
RENTS & VACANCY BY SUBMARKET
UNDER CONSTRUCTION BY SUBMARKET
Source: Cushman & Wakefield | Commercial Kentucky ResearchNote: Submarkets are defined by Integra Realty Research
Source: Integra Realty Research
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New Cut Rd
So. Preston Hwy
So. Bardstown Rd
Mid-Bardstown…
Shelbyville Rd
East Brownsboro/Westport Rd
Frankfort Ave/Brownsboro Rd
CBD
Dixie Hwy
Avg Rents
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New Cut Rd
So. Preston Hwy
So. Bardstown Rd
Mid-Bardstown Rd/Taylorsville Rd
Shelbyville Rd
East Brownsboro/Westport Rd
Frankfort Ave/Brownsboro Rd
CBD
Dixie Hwy
Vacancy Rate
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3LOUI SVI L L E , KEN T UCKYMARKET INSIGHTThird Quarter 2019
Multifamily investment activity for Q3 2019 in the Louisville MSA rose sharply. With occupancy rates high and the recent rent increases, the market is very active.
Regional and national apartment funds have been the largest active players for acquiring multifamily in the Louisville marketplace. Private capital also continues to play a major role in the B & C market.
Class A – Cityscape Residential sold Axis on Lexington (300 units) to B&M Management Co. for $207K per unit. The asset is located in the Central/Downtown Area.
Class B – Brown Capital, LLLP sold Phoenix Place Apartments, (265 units) located in the Central/Downtown Area to LMS Phoenix Hill, LLC. The sale price was $92K per unit.
Class A – BML Managers, LLC sold Bradford Mills Lofts (146 units) to Venterra Realty for $144K per unit. This property is located in the Central/Downtown Area.
INVESTMENT ACTIVITY
NOTABLE SALES
PRICING & CAP RATES
HISTORICAL SALES VOLUME
Source: Real Capital Analytics, Commercial Kentucky | Cushman & Wakefield Research
Source: Real Capital Analytics, Commercial Kentucky | Cushman & Wakefield Research
$0
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0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%
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2015
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2015
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3/1/
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12/1
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3/1/
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Change in Sales (YOY)
4LOUI SVI L L E , KEN T UCKYMARKET INSIGHTThird Quarter 2019
SELECT CBD SUBMARKET NEWS
• Local developer, Kevin Cogan’s Jefferson Development Group is working on a new mixed-use development called 422 e-main located across Main Street from Slugger Field. Plans call for 343 apartment units, plus 11,000 sf of commercial space.
• Louisville Metro Government is working to rezone over 9 acres on Barret Avenue near Breckinridge Street. The rezoning is necessary to proceed with a mixed-use development from The Marian Group. The project could include multifamily, hotel, commercial and community space.
• 800 Tower City Club Apartments have been listed for sale. Capstone Apartment Partners purchased the 286-unit complex in 2015 for $20M. Capstone has completed approximately $17M in renovations including upgrades to the energy and operating systems, HVAC, a new business center, conference room, theater and penthouse level Sky Club and Sky Park.
• Deliveries since Quarter 1 of 2019 include Poe Company’s RiverPark Place (107 units) and Burlington Capital’s The Lodges (288 units).
• Capstone Realty announced plans to expand the scope of their $14M Commerce Crossings Apartments to 190 units. The large complex is located near the front of the Commerce Crossings business park , which is home to over 4,000 employees.
• Louisville-based Hurstbourne Property Group has begun rezoning multiple properties at S. Watterson Trail and Hurstbourne Parkway from primarily residential uses to high-density R-6 and C-1 commercial zoning. This project, Star Hill, covers 35 acres and is expected to include multiple apartment complexes and retail businesses.
Copyright © 2017 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple sources considered to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy.
About Cushman & Wakefield
Cushman & Wakefield is a leading global real estate services firm that helps clients transform the way people work, shop, and live. Our 45,000 employees in more than 70 countries help occupiers and investors optimize the value of their real estate by combining our global perspective and deep local knowledge with an impressive platform of real estate solutions. Cushman & Wakefield is among the largest commercial real estate services firms with revenue of $6 billion across core services of agency leasing, asset services, capital markets, facility services (C&W Services), global occupier services, investment & asset management (DTZ Investors), project & development services, tenant representation, and valuation & advisory. 2017 marks the 100-year anniversary of the Cushman & Wakefield brand. 100 years of taking our clients’ ideas and putting them into action. To learn more, visit www.cushwakecentennial.com, www.cushmanwakefield.com or follow @CushWake on Twitter.
commercialkentucky.com
Craig CollinsSenior DirectorCushman & Wakefield | Commercial Kentucky 333 East Main Street, Suite 510Louisville, KY 40202 Tel: +1 502 589 5150 [email protected]
Mike KemetherVice Chair, Multifamily Advisory GroupCushman & Wakevield1180 Peachtree Street, Suite 3100 Atlanta, GA 30309 Tel: +1 404 853 5269 [email protected]
