2010 Global Market Report - NAI Commercial Real Estate

Louisville, KentuckyBaton Rouge, LouisianaContactNAI Walter Wagner, Jr.Company Realtors, LLC+1 502 562 9200Metropolitan AreaEconomic Overview2009Population2014 EstimatedPopulationEmploymentPopulationHouseholdAverage Income1,252,7951,299,624684,103$61,277Over the past year, metropolitan Louisville’s commercial realestate market has weathered the recession relatively wellin spite of an unemployment rate that rose four points to10.3% and a limited influx of new businesses to the area.In other good news, home sales are up approximately 15%over 2008.The Louisville office market ended Q3 2009 with a vacancyrate of 11.2%, up from 10.7 % in 2008. Class A vacancystood at 13.3% compared to 13.7% for Class B and 6.9%for Class C space, The CBD reported a vacancy rate of 5.9%for Class A buildings. Net absorption was negative 68,943SF. The average rental rate in all classes was $15.49/SF,a 0.3% decrease from the end of Q2 2009. Class A sectorrents averaged $19.91/SF, Class B stood at $14.68/SF andClass C at $12.16/SF.The retail market did not experience a significant changeover the first three quarters of 2009. The vacancy rateincreased to 8.6%, up slightly from 8.4% in 2008. Netabsorption wavered between positive and negative territorythroughout the year, with indicators pointing to a relativelyflat or slightly negative result for the year. Vacant subleasespace decreased by 3,715 SF. Rental rates also decreasedslightly, ending at $11.97/SF for the year.The industrial market ended Q3 with a vacancy rate of13.2%, a slight increase over the previous quarter and upfrom 12% a year ago. Net absorption totaled positive1,299,350 SF. Vacant sublease space decreased, endingthe quarter at 1,251,872 SF. Rental rates were $3.57/SF, anincrease over the previous quarter.Louisville’s downtown arena continues to be a bright spot asthe major construction project in the area. Scheduled toopen in 2010, the $250 million, multi-purpose arena isexpected to generate more than $100 million in downtowninvestment and construction.ContactNAI Latter & Blum+1 225 295 0800Metropolitan AreaEconomic Overview2009Population2014 EstimatedPopulationEmploymentPopulationHouseholdAverage Income773,208787,300387,346$60,749Baton Rouge, the Capital of Louisiana, has withstood theeconomic slowdown of 2008-2009 relatively well. Weeklywages increased from 2008, the Brooking Institution rankedBaton Rouge the sixth-best performing metro area in Q22009, and Forbes ranked Baton Rouge as the seventh-bestmid-sized city for job growth in the country.Baton Rouge has remained well insulated due to severaleconomic catalysts. Louisiana State University, with anenrollment of 35,000 calls Baton Rouge home along withseveral other universities and colleges. The inmost port onthe Mississippi River is located in Baton Rouge, generatinga strong barge and shipping base for industrial growth.Numerous plants take advantage of the Mississippi Riveraccess like DOW, Exxon, Shintech, Kaiser and Nucor.Other economic generators include Baton Rouge as thestate capital as well as having the I-10 and I-12 corridorrunning through the city. This provides a big boost to BatonRouge's hospitality sector. Medical is another large employerwith five major hospitals in the city.Although rental rates and occupancies have been holdingstrong across the board, Baton Rouge is finally seeing someinventory coming on line. Office vacancies for Class Aspace slipped to 9% citywide excluding the additionalsublease space that could top 100,000 SF or an additional2% vacancy by year’s end. Retail occupancies slipped aswell in 2009. Overall city vacancies were 12.4%, up 1%from a year earlier.The strongest sector this year has been multifamily with anear 95% occupancy rate citywide. In addition, the highestprice per door was paid for an apartment complex in thesale of the 300-unit Millennium, which topped $140,000per door.All things considered, Baton Rouge continues to show signsof a resilient economy with companies like Albemarleestablishing its corporate headquarters in the capital cityand outside investors looking at Baton Rouge and the GulfCoast region as a healthy place to invest.MedianHousehold Income$52,415MedianHousehold Income$47,801Total PopulationMedian Age39Total PopulationMedian Age34Louisville At A Glance(Rent/SF/YR) Low High Effective Avg. VacancyDOWNTOWN OFFICENew Construction (AAA)Class A (Prime)Class B (Secondary)SUBURBAN OFFICENew Construction (AAA)Class A (Prime)Class B (Secondary)INDUSTRIALBulk WarehouseManufacturingHigh Tech/R&DRETAILDowntownNeighborhood Service CentersCommunity Power CenterRegional Malls$$$$$$$$$$$$$18.2518.008.0018.5017.507.001.501.505.4511.0010.0015.0020.00$$$$$$$$$$$$$25.0024.0016.0025.0023.0014.004.504.508.2530.0020.0020.0040.00N/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/AN/A7.5%8.3%N/A18.0%19.5%13.4%12.4%9.0%8.6%10.0%12.0%4.0%DEVELOPMENT LAND Low/Acre High/AcreOffice in CBDLand in Office Parks$$550,000.00940,000.00$ 1,900,000.00$ 1,450,000.00Land in Industrial ParksOffice/Industrial Land - Non-parkRetail/Commercial Land)Residential$$$$25,000.0055,000.00150,000.0030,000.00$$$$110,000.00100,000.00850,000.00140,000.00Baton Rouge At A Glance(Rent/SF/YR) Low High Effective Avg. VacancyDOWNTOWN OFFICENew Construction (AAA)Class A (Prime)Class B (Secondary)SUBURBAN OFFICENew Construction (AAA)Class A (Prime)Class B (Secondary)INDUSTRIALBulk WarehouseManufacturingHigh Tech/R&DRETAILDowntownNeighborhood Service CentersCommunity Power CenterRegional Malls$$$$$$$$$$$24.0020.0012.5028.0017.9512.003.00N/AN/A12.008.0023.0012.00$$$$$$$$$$$28.0021.5016.0028.0023.0016.005.15N/AN/A24.0024.0040.0080.00$$$$$$$$$$$27.0020.7514.5028.0019.8014.754.00N/AN/A16.0015.0028.0035.0041.0%9.7%25.0%25.0%6.0%23.0%13.8%N/AN/A6.0%12.5%6.6%N/ADEVELOPMENT LAND Low/Acre High/AcreOffice in CBD$ 900,000.00 $ 1,750,000.00Land in Office ParksLand in Industrial ParksOffice/Industrial Land - Non-park$$$215,000.00130,000.0080,000.00$$$350,000.00260,000.00350,000.00Retail/Commercial Land$ 350,000.00 $ 1,250,000.00Residential$ 15,000.00 $ 50,000.002010 Global Market Report ■ www.naiglobal.com 94