The COVID-19 pandemic has hit the commercial real estate markets in all Midwest cities. But the impact of economic slowdowns, business shutdowns and stay-at-home orders have slowed commercial real estate transactions more in some cities than in others.
A good example? The Lexington area of Kentucky. According to the latest numbers from NAI Isaac, the pandemic has had a negative impact on the real estate market here. But that impact hasn’t been as severe as in many other Midwest cities.
Consider the industrial market. In its midyear Lexington-Fayette County, Kentucky, report, NAI Isaac says that the industrial property market in this slice of Kentucky has remained steady during a challenging first half of 2020. The vacancy rate for 421 industrial properties in the Lexington-Fayette County market remained low at 3.60 percent, and the market ended the second quarter with 678,233 square feet of vacant space.
Bulk warehouse had the lowest overall vacancy rate at 0.99 percent, while manufacturing had the greatest at 9.25 percent.
NAI Isaac pointed to some positives in the area’s office market, too, with this sector’s vacancy rates falling for Class-A and Class-B properties at the end of the first half of the year.
Class-A and Class-B office space in the Lexington CBD yielded a total vacancy rate of 11.12 percent. The Class-A vacancy rate was 11.29 percent, while the Class-B office vacancy rate was 10.95 percent.
The retail sector has been hit particularly hard by the COVID-19 pandemic. But in Lexington, much of this sector is holding its own so far this year. NAI Isaac reported that the regional mall vacancy rate stood at 3.87 percent while this rate for neighborhood centers was a higher 8.35 percent. Community and power centers saw the highest vacancy rate at 11.27 percent.
