Southeast Real Estate Business - September 2005
According to the Integra Realty Resources Kentucky-Southern Indiana’s Louisville MSA Apartment Survey, the apartment market is healthy and improving with increased rents, as is evidenced by the consistent occupancies of 93 percent to 94 percent for the past 2 years, and rents rising at 2 percent and 3 percent for one- and two-bedroom apartments, respectively, over the prior 6 months. The average apartment rents in Jefferson County are $509 for one-bedrooms and $620 for two-bedrooms.
New products are commanding a 20 percent to 50 percent rent premium and meeting with success. Rent concessions have declined with less than one-third of the communities offering free rent. Concession range from one-half month to one month free in a ratio of 30 percent to 70 percent, respectively. The areas with the highest rent increases are those with no new product available. Those with weak to declining rents are Eastern Jefferson County>'s affluent areas where significant new products are being introduced. The abundance of older communities in the survey inventory tends to suppress rents.
However, according to interviews with management of The Paddocks, the newest upscale community to be brought to the market, the community has a waiting list and cannot complete units to meet the demand; the monthly absorption is in the upper teens. The communities on the Outer Belt, Gene Snyder Freeway, all have met with success. The Paddocks has a commanding and appealing view from Gene Snyder, which is a huge marketing advantage, as observed in many MSA’s in the region. The Paddock’s current rents are one-bedrooms starting at $640 and two-bedrooms starting at $855. Additionally, there are 400 units under construction throughout Jefferson County. Four projects currently are in the planning stages and are predicted to bring a total of around units to the market.