Multifamily market in Lexington, KY

[Kapil M.]

Hello All,

Can someone comment on the multifamily market in and around Lexington, KY? I focus on B/C class multifamily assets – mostly 50+ units but also smaller ones with strong cash flow potential. I am planning to fly out there in a few weeks to tour a couple of properties and would love to hear from and meet some experienced folks who have been active in the market.

Specifically, it would be great if you could comment on the following:

1.What areas do you see as having most potential for 10+ unit B or C class multifamily

2.Any good Property Management Companies you would recommend?

3.Any good multifamily brokers that I should talk to?

4.Any out of state investors here on BP who have had success in this market?

5.Any good places to eat/drink and places where I can just talk to the locals

After my trip, I would also be happy to share with you all what I learn!

Thanks,

Kapil

[James Wilcox]

@Kapil M. Those are some pretty loaded questions. Who are you touring these properties with? That makes your question 3 kind of confusing because you must have someone you are already working with. Here are my answers though.

If you are wishing to invest in Lexington you will need a basic understanding of our urban service boundary. The Urban Services Boundary is something that does affect values here in Lex so that is important to understand. We were the first in the nation to set up a USB and one of the few cities that currently has one.

1.) With that type of MF asset, the area isn't really relevant as much. You are working off of how much money the property makes (cap rate) since these are commercial properties. There will be slim pickings on that type of asset you are describing but they definitely exist. Everything is for sale for the right price though but you may need to be more flexible on your property type and strong "cash flow" determination. We definitely have lower prices than Boston though. :)

2.) KY Life Property Management

3.) If you are already working with an agent or broker you should stick with them.

4.) I am sure there are some.

5.) You may want to try Napa Prime in downtown. That way you can see newer commercial development and be near some of college downtown scene if that rental market is of interest. We do have a distillery district which may be of interest for your thirst if you are into adult beverages.