Office Analysis

Market Summary

The regional office market remains healthy compared to other regions across the nation that are still experiencing the fallout of the Covid-19 pandemic. Demand for office space in the region has primarily been for small-scale spaces. Office space is well spread throughout Fayette County.

Regional Comparison

There is approximately 22.4 million square feet of office inventory in Fayette County and the six surrounding counties as of Q1 2021. Lexington has historically been considered a smaller office market compared to larger-scale metro areas such as Louisville, Cincinnati, and Nashville, however its size has allowed it to weather recent economic shifts. The region currently has a vacancy rate of 7% while Louisville and Cincinnati both have vacancy rates above 15% across their metros.

Trendline Analysis

Trendlines project 20-year demand between 2.5 million square feet and 4.6 million square feet of new office space. This translates between 123,000 square feet to 231,000 square feet on an annual basis. Based on the current metrics of Lexington’s office market and the relative slow growth of office-centric economic sectors, it is feasible for Lexington to target the conservative growth scenario.