Analysis of Commercial Real Estate Markets in Kentucky
Some months ago I determined to perform an analysis of the top ten real estate markets in the ten most populous cities in Kentucky with respect to their demographic characteristics. Some of my findings are fascinating. For example, the population of Louisville comprises approximately 55% of the residents within the top ten most populous cities. That’s over twice the number of residents in Lexington and nearly 14 times the size of Bowling Green. To give you some perspective of their relative size, here’s a pie chart of the population of the top ten most cities. The pie chart only depicts residents of the largest cities and excludes all other residents.
Louisville, Kentucky Dominates
As you can see in the chart, Louisville is a behemoth compared with the other top ten cities in Kentucky. BUT…size isn’t everything. With more residents comes more competition…among other things. One of the more interesting aspects of appraising commercial real estate is the difficulty of evaluating relative desirability. For example – all other things being equal, would you rather own a single convenience store in a small town with no other convenience stores or would you rather own a convenience store in a large city with three other convenience stores within a mile radius? As my brother and I discussed over the weekend, not all value is quantifiable. The demographic characteristics that appeal to one owner may not appeal to another and from one property type to another. While the prospective purchaser of a self-storage facility would find a high percentage of renters in an area a desirable characteristic, a homeowner might not. A high traffic count would appeal to an investor looking for a convenience store site while an office space user probably won’t.
So…my aim is to provide you, the reader, with an overview of the demographic features of the top ten most populous cities in Kentucky to enable you to make a well educated decision if you plan to build or buy in Kentucky. In the weeks to come we will consider the most relevant demographic features of these cities including the three most important – employment, population, and income.