2019-08-30_DTZ戴德梁行_Retail_Q4_2017_Louisville_2页_189kb

Louisville Retail Market Q4 2017 Summary

Core Content

The Louisville retail market in Q4 2017 remained stable, with a focus on targeted redevelopment and adaptive reuse of existing properties. The market is experiencing a shift towards more mixed-use developments and omni-channel retailing, driven by demographic changes, job growth, and evolving consumer behavior.

Main Views

• Market Stability: The overall retail landscape in Louisville is stable, with limited new construction and a focus on redeveloping existing properties.
• Redevelopment Focus: Redevelopment is concentrated in high-traffic areas such as the CBD and key retail intersections. Projects like the proposed transformation of the southwest corner of Shelbyville Road and Hurstbourne Parkway into a multi-use retail space are notable.
• CBD Development: The Central Business District is expected to see significant new multifamily units in 2018, which will increase retail traffic and lead to adaptive reuse of office and industrial buildings for retail purposes.
• Retail Expansion: Existing tenants are expanding their footprints, such as Kroger's development of cheese bars and sushi bars, and the opening of new stores like Big Lots and Roses Department Store.
• Adaptive Reuse: Vacant large box retail spaces are being repurposed for alternative uses, including self-storage and smaller retail formats. Examples include the Altitude Trampoline Park and the potential conversion of the Kmart on Poplar Level.
• Speculative Development: Speculative development is active in specific areas, including Southpoint Commons, Middletown Station, and areas near River Ridge Industrial Park. These developments are attracting retail operators and are well-received at rents ranging from $20 to $25 psf.
• Rental Trends: Rents in the Louisville Metro area are stable, but high-demand CBD locations may see rents rise above $30 psf. Vacant large box properties are asking as low as $5.00 psf.
• Sales Activity: There was limited retail property sales activity in Q4 2017, but single-tenant NNN lease properties remain in demand due to the national real estate market's vibrancy.
• Regional Malls: Regional malls are redeveloping to attract tenants that can turn them into destination locations, with examples like the Mall of St. Matthews converting Forever 21 space into a Dave & Busters venue.

Key Information

Economic Indicators

Regional Indicators

Speculative Development

• Southpoint Commons: A 363,000 sf lifestyle center in southern Jefferson County with speculative development proposed.
• Middletown Station: Attracts speculative retail strip centers near English Station Road and Shelbyville Road with rents between $20 and $25 psf.
• River Ridge Industrial Park: Two local developers are targeting this area for a grocery-anchored retail development due to its significant job growth.

Rent Trends

• CBD Rents: Expected to rise above $30 psf for high-demand locations.
• Strip Commercial Rents: Average of $14.12 psf in southern Jefferson County and $16.80 psf in northeastern Jefferson County.
• Vacant Large Box Rents: Asking as low as $5.00 psf, with some properties at $8.00 psf.

Outlook

• 2018 Outlook: Positive for the Louisville macroeconomy with continued job and wage growth driving demand for goods and services.
• Retail Shift: Retailers are expected to shift their footprint designs to accommodate omni-channel retailing.
• Tenant Retention: Retail owners and developers are focusing on tenant satisfaction to prevent relocation and maintain a stable market.

Contact Information

• Cushman & Wakefield
  • Address: 333 East Main Street, Suite 510, Louisville, KY 40202
  • Website: commercialkentucky.com
  • Contact: Necia Nast, Research & Marketing Analyst
    • Tel: +1 502 589 5150
    • Email: nnast@commercialkentucky.com

About Cushman & Wakefield

Cushman & Wakefield is a global real estate services firm with over 45,000 employees in more than 70 countries. They provide a wide range of services including agency leasing, asset services, capital markets, and investment & asset management. The firm is among the largest in the commercial real estate sector, with a revenue of $6 billion.

Disclaimer

The information in this report is gathered from multiple sources considered reliable. It may contain errors or omissions and is presented without any warranty or representations as to its accuracy.