The 20,848-unit Lexington Apartment market saw another slight uptick in vacancy in the second quarter, but the 6.0% rate is still favorable. The current reading is 10 basis points higher than the prior quarter but down 120 year-over-year. First Glance data from Reis put the third quarter rate at 5.9%. The Class A vacancy rate is reported at 5.9%, up 10 basis points over the quarter, and the Class B/C rate is reported at 6.0%, unchanged from the prior quarter. Construction has been quiet here. From 2002 to 2011, the market saw only 1,553 units added, or 155 per year on average. Net absorption was even lower, at 720, or 72 units per year on average. This is not a market with a strong appetite for multifamily space.
Less than 100 units completed in both 2010 and 2011. Thus far in 2012, the Leestown Road Townhome apartments, with 92 units, completed in April in West Fayette County and the Lakewood Park apartments, with 195 units, completed in August in the South Circle area. There are no other apartment projects under construction, according to Reis’ latest construction data. Accordingly, vacancy is forecast to finish 2012 at 5.8%, and lower in 2013, before beginning to track slightly upward.
Rents here are low. Reis reports second quarter average asking and effective rents of $676 and $644 per month, up 1.1% and 1.2% for the quarter, and once again up strongly at 3.4% and 3.9% for the year. Class A asking rents are reported at $824 per month, up 1.5% for the quarter, and Class B/C rents, at $584 per month, are up 0.7%. First Glance data give a third quarter 2012 asking rent of $681 per month. Looking forward, Reis forecasts gains of 3.6% asking and 4.5% effective in 2012, raised from previous estimates, with similarly strong gains in the following years.