Lexington continues to experience rapid absorption of Industrial land and the increased pricing that accompanies a limited supply and strong demand, according to Bruce Isaac, vice president of NAI Isaac Commercial Properties. "The majority of industrial development is taking place in north Lexington because that' where the appropriately zoned land is located and where Interstates 75 and 64 intersect," says Isaac.

The industrial market in Lexington is warehouse and distribution-oriented because Interstates 75 and 64 intersect north of Lexington and two-thirds of all U.S. consumers are within a one day drive, adds Isaac. Light manufacturing and R & D technical companies are highly sought by landlords, and significant state and local incentives are available for companies that move into the area.

The University of Kentucky' Coldstream Park Research Campus and Lexington-United' Bluegrass Industrial Park are significant industrial developments that have been added to the Lexington market. "Both developments should positively impact our market," says Isaac. "Lexington' recruitment of R & D and high-paying manufacturing companies should attract similar users and supporting suppliers to service these industries."

Growth in automobile production facilities in Kentucky and surrounding states has also created business opportunities for component suppliers to serve this large market centrally from facilities in Kentucky.

Recent leases include Amazon.com' entrance into the market, leasing 600,000 square feet on Mercer Road for a regional distribution center.

Rental rates in the Lexington area range from $3 to $5 for bulk warehouse space, $3.50 to $5 for manufacturing space and $9 to $12 for high tech/R&D space. Vacancy rates are at 8 percent for bulk warehouse, 5 percent for manufacturing and 3 percent for high tech/R&D.

Speculative construction for tenants in the 3,000 to 10,000-square-foot range and build-to-suits should continue through 2001, according to Isaac. Larger speculative construction should slow until the current supply and recent vacancies such as the Contractors Sales and Rentals (±100,000 square feet) and Clark Materials (±385,000 square feet) facilities are absorbed.

The areas to keep an eye on in the near future are the north and northwest corridors, which are the likely areas for industrial growth. "The existing industrial base, Interstates 75/64 access and the new outer-loop access road, Citation Blvd.,will assure that this area continues to be a prime industrial area," says Isaac.

Bruce R. Isaac, CCIM, RECS, is vice president of NAI Isaac Commercial Properties, Inc.


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