Transportation Changes in America and Potential Impact on Commercial Real Estate
Our firm provides appraisals for commercial real estate in Louisville and southern Indiana. Recently, Louisville’s highway system dramatically changed with the opening of two new bridges: Lewis & Clark Bridge and Abraham Lincoln Bridge. The bridges alter the main linkages for car and truck traffic in the city by allowing the bypass of downtown Louisville, which before last month, was not possible. This is a dramatic shift because it has the potential to shift the desire of commercial real estate buyers from certain parts of the city to another.
For example, Floyd County industrial vacancy, reported by local brokers, is between 12% and 15%. These are the highest industrial vacancy rates compared to all of the other Louisville submarkets, which generally include Jefferson and Bullitt counties in Kentucky and Clark and Floyd Counties in Indiana. The Sherman-Minton bridge, the I-64 bridge on the west end of the city, is now the only non-toll bridge, as of December 2016. Semi-tractor trailers will now pay $10-$12 per trip across the other three bridges. At just one round trip per workday, that’s $5,200 to $6,240 per truck per year. Most local trucks are crossing the bridges multiple times per day. With the availability of industrial space in Floyd County, which is now directly served by Louisville’s only non-toll bridge, will commercial business relocate there in order to avoid tolling charges ? We will be watching this submarket over the next few years and talking with local brokers to see if the bridges and tolling will help or hurt the Floyd County industrial sector.
Personally, I’m a fan of the new bridge. When I moved to Louisville in 2006, I asked someone about the rumors regarding the east end bridge, because I lived in Oldham County. They said it would never happen, it was a pipe-dream and campaign promise only. But, 10 years later, the bridge is done and now Louisville and southern Indiana have a new connection; one that doesn’t go through downtown. If our firm can provide you with a valuation of your real estate, please contact us.