NAI Isaac Releases Lexington, KY CRE 2017 Mid-Year Market Report
The Lexington commercial real estate market was mostly positive during the 1st and 2nd quarters of 2017 with an impressive vacancy decrease in the Industrial market which already had a low vacancy rate at yearend 2016. Low Industrial vacancy is a nationwide trend that is likely tied to the growth of internet shopping and the need for more warehouses closer to various customer markets for companies selling products. There was a smaller decrease in vacancy within the Retail sector that also had a low vacancy rate at yearend 2016. Fluctuations within Suburban Office and CBD Office sectors demand and higher vacancy rates despite the lack of speculative construction continue to indicate those sectors are still “right-sizing” with companies moving to more open floor plans with less square footage per employee. Further impacting the office market is an increase in office tenants seeking non-traditional office space, particularly in the tech and marketing segment.
Market rental rates for all commercial sectors have remained stable over the past 6 months and are expected to remain stable through yearend 2017 with the likelihood of Industrial rent increasing and the possibility of Retail rent increasing.
-Al Isaac, President