Industrious Investors
Developers of light industrial properties hit paydirt

If you need a light industrial property in Lexington, you’ll have to work hard to find the right location. Demand for sites and improved office/warehouse properties in the Lexington area is at a recent high. Small building sites of approximately one acre and improved properties with less than 10,000 usable square feet seem to be the most sought-after.

Much of Lexington’s available vacant land and improved space have been absorbed. With low vacancy levels coupled with the increased demand, the economics to develop new speculative industrial facilities seem to be justified. State and local government incentives for businesses to expand and relocate in Kentucky are stimulating additional demand for larger industrial/distribution space. Lexington’s inventory of industrial land, however, is limited and prices per acre range from $100,000 to $150,000. High prices and limited supply have created demand for sites in neighboring counties to Fayette County where industrial land prices are substantially less. In some cases industrial land is offered for less than $20,000 an acre.

East Lexington Industrial Park, a new I-1 development, located along Contract Street and Floyd Drive just south of New Circle Road, provides an example of the current demand for and rapid absorption achieved by new industrial developments. This 44-acre industrial park is platted for approximately 31 lots, with the lot sizes ranging from .75 to 1.46 acres, not including two larger tracts of 3.13 and 11.13 acres each.

In less than a year (from July, 1999, to May, 2000), all 21 of the lots (totaling about 24.56 acres) in the first phase of development were sold. Typical price per acre ranged from $105,000 to $120,000 with some exceptions.

New owners planning to move or expand their business operations to East Lexington Industrial Park include a glass supplier, several construction firms, a dry cleaning operation, mechanical contractor, insulation supplier, storage warehouse, distribution operation and automotive repair shop. Because of the increase in demand, the future outlook for owners of similar industrial properties looks extremely favorable.

Steve Rohlfing is principal appraiser for Realty Research Corp.

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