2024 STATE OF DOWNTOWN REPORT
GROWING AND LOOKING TO THE FUTURE
Downtown Lexington Partnership (DLP) is excited to present the sixth annual State of Downtown Report sponsored by RW Baird and host the sixth State of Downtown Reception presented by Republic Bank and hosted at Harper Hall. The information contained in the report provides benchmarks and insight, provided by DLP members and stakeholders, into downtown’s economic health as well as forecasting future economic trends.
Many thanks to DLP committee members, contributors, and sponsors for making this report and reception possible.
CONTRIBUTORS AND SOURCES
y Downtown Lexington Partnership
y Fayette County PVA
y Cowgill
y LEXPARK
y Lextran
y Lexington Police Department
y Lexington-Fayette Urban County Government
y Loopnet.com
y NAI Isaac
y Transylvania University
y VisitLEX
y University of Kentucky
y U.S. Census Bureau
y Walkscore.com
A MESSAGE FROM MAYOR LINDA GORTON
Friends of Downtown,
The countdown has begun … Lexington’s 250th anniversary is coming in 2025!
We’re planning a yearlong party, with lots of activities all over town, but especially in the heart of our city. We’re hoping our downtown businesses will lead the way.
We’ve been working together for many years to build the lively, engaging downtown we all enjoy today! As a result, we have a downtown that is bustling with restaurants, art galleries, entertainment venues, offices, and hundreds of residents.
Our work on downtown continues with the reinvention of Phoenix Park, redevelopment of the High Street lot at Central Bank Center, the soon-to-open Gatton Park on the Town Branch, and much more.
Let’s get together in 2025 and celebrate the city we love! For more information, contact our 250Lex Commission at 250Lex@lexingtonky.gov.
Thank you,
Linda Gorton, Mayor
Allen McDaniel Executive Director/CEO Downtown Lexington Partnership
Jennifer Taylor DLP Board Chair Forvis Mazars
James H. Frazier, III Chair Downtown Lexington Management District
EXECUTIVE SUMMARY
Downtown continues forward with positive momentum in most market segments and multiple community groups continuing to work toward enhancing downtown safety. Economic indicators showed a strong customer base, including the presence of office workers, visitors, students and people attending special events. The commercial real estate market showed strong sales, a stable office market, and increased property values in the urban core further enhanced by the Downtown Lexington Management District. A strong pipeline of projects will continue to transform downtown. Mobility and transit benchmarks rose across the board. E-scooter trips show continued popularity, public transit ridership increased, and on-street and off-street parking occupancies demonstrate continued demand. Living and quality of life benchmarks were highlighted by strong for-sale and apartment markets driven by attractive amenities and neighborhoods. The Central Bank Center and affiliated properties elevate downtown as a highly desirable location for both conventions and visitors, and local offerings bringing in regional traffic to the downtown core accelerated by excellent entertainment offerings scheduled throughout the week. The continued investments in downtown are augmented by construction and new projects announced by the University of Kentucky and continued interest by developers in Lexington’s northside.
In the near-term downtown’s growth should continue. Strong consumer spending and a collaborative, public-private approach to public safety will allow Downtown Lexington to adapt to challenges more quickly than seen in other communities. Looking further ahead, future projects like Gatton Park on the Town Branch, Phoenix Park, and the upcoming $350 million Lincoln Webb development of the 14-acre High Street parking lot will continue to drive downtown growth.
DLP MISSION AREA BOUNDARY
DLMD BOUNDARY PARKS
DOWNTOWN LEXINGTON MANAGEMENT DISTRICT
THE DISTRICT
Downtown Lexington Management District anchors the downtown and through an annual property owner assessment, provides more than 11,000 hours of enhanced cleaning and safety services and invests significant dollars in economic, business support and art programs annually. These investments and programs have provided a high return on investment to property owners as seen in increasing property evaluations and vibrant street level mix. In 2023, the total property values grew by $21.3 Million dollars over 2022 and have increased by more than $162 million since 2015 when the district was first formed.
“LOOKING BACK AT THE INCEPTION OF DLMD IN 2015 IS EXTREMELY TELLING. IT IS CLEAR THE PROGRAM HAS HAD AN INCREDIBLE IMPACT ON DOWNTOWN IN MANY ASPECTS. PROPERTY VALUES, SAFETY, AND CLEANLINESS ARE JUST A FEW OF THE IMPROVEMENTS.”
– James H. Frazier III, Chair, Downtown Lexington Management District
LOOKING AHEAD
The DLMD will be up for renewal in 2025. Strong performance and a demonstrated history of success show that the DLMD is an essential component of our successful, thriving downtown. The work of the ambassadors coupled with targeted grant programming ensures maximum impact with the dollars collected. Property owners can always learn more and access program information at the DLMD website. Downtown Lexington Partnership is proud to provide management and administration of the DLMD.
2023 AMBASSADOR SUMMARY
CUSTOMER BASE
2023 RECAP
With an increase in free and ticketed events, downtown visitation was strong, providing more customers to support downtown businesses. In addition, the student population continues to increase. More economic activity was generated from the downtown customer base in 2023 driven by enhanced programming at Central Bank Center and convention bookings.
STUDENTS
The total university student population grew for the seventh year providing an important customer base for downtown. The return of students to campus provided a positive economic impact in 2023.
Student Enrollment
FTE Fall Semester
CONVENTIONS AND ATTRACTIONS
As the center of the Bluegrass Region’s convention market, downtown benefitted from a robust demand for conventions and meetings yielding an increase in economic activity. In 2023, downtown hosted 237 large-scale events bringing 436,000 people into downtown. This continues an upward trend from 2022. Significant growth of the trend has continued in 2024 with the completion of the $300 million renovation and expansion of the Central Bank Center.
436,000 Attendees to Central Bank Center
237
Large-scale meetings, conventions, public shows or trade shows
35,000+
Number of college students
CONVENTIONS AND ATTRACTIONS
In 2023, Downtown Lexington Partnership hosted eight events spanning 108 days with an economic impact of more than $3.2 million. These events and festivals attracted more than 120,000 guests to downtown including local Lexingtonians and visitors from across the world.
COMMERCIAL REAL ESTATE
2023 RECAP
Downtown commercial real estate continued to rebound and grow in 2023. There were nearly $8 million in the top 10 commercial real estate sales, new street level, hospitality and food service business opened, and the value of real estate in the Downtown Lexington Management District continued to increase at an enhanced rate.
2023 COMMERCIAL SALES
2023 Top 10 Downtown Commercial Transactions
*Denotes multiple parcel transaction
OUTLOOK
Commercial sales should remain moderately steady. The office market should remain stable but will continue to adapt as leases contain less square footage than demanded previously. Property values will continue to rise in the Downtown Lexington Management District propelled by enhanced cleaning, safety assistance, and hospitality encounters offered by the Ambassadors.. However, the biggest factor in driving growth will be the strong pipeline of new projects underway like the Lincoln-Webb 14-acre High Street development adjacent to Central Bank Center, the renovation of 325 W Main (formerly the Triangle Center), the upcoming completion of Gatton Park on the Town Branch, The HILL Building, The Omni building, and The Warfield Building.
$5 Billion in completed and projects in the pipeline since 2015
$536 Million of property value within the Downtown Lexington Management District
3.5 Million Square feet of CBD Class A and B office space
7.7% CBD Office vacancy
OFFICE MARKET
The Downtown office market has remained relatively stable since 2018 even as the market absorbed the 155,000 square feet of new space in City Center in 2019, and the effects of the pandemic on remote/hybrid work popularity. According to NAI Isaac, 2024 mid-year vacancy rate for Class A and B space was 7.7% compared to 11.67% in 2021 and 11.12% in 2020. Downtown accounts for approximately 40% of the total office space in the market. Slightly higher vacancy rates can be seen in the suburban market indicating continued interest in downtown office space.
The vacancy rates reflect the amount of unleased space but don’t necessarily reflect the actual number of office workers present. The leasing environment appears stable in the near term, but as footprint demands reduce, renewals may be impacted long term. The number of tenants has fluctuated as organizations evaluate space needed with a hybrid work environment.
Downtown Central Business District Office Market Trend
Suburban Office Market Trend
*Note: Data provided by the NAI Isaac 2024 Mid-Year Reports.
THE DOWNTOWN PROJECT PIPELINE
Since 2015 downtown’s project pipeline has grown to nearly $72.05 billion in investments including completed, underway and announced projects. These investments represent a broad range of institutional developers, such as the downtown universities, non-profits, private development projects, and public investment in infrastructure and parks. Future announced projects will continue to grow downtown and attract more people to live, work, play and invest.
INVESTMENTS
$2.4 BILLION
$1.05 BILLION
$68.60 BILLION
THE PROJECTS
The timeline shows a sampling of the $72.05+ billion projects since 2015 that have transformed downtown, University of Kentucky and Transylvania University as well as future projects that will continue to shape and revitalize downtown.
JAMES PEPPER DISTILLERY
$1.3 MILLION
A multi-year renovation project of the historic James E. Pepper Distillery, a National Historic Landmark, which had been abandoned for over 50 years enabling distilling to begin once again.
2018 2019
FAYETTE COUNTY COURTHOUSE
$30 MILLION
A complete interior and exterior renovation now housing a restaurant and bar, the Visitors Center, special event space and offices.
CITY CENTER
$300 MILLION
12-story office tower incorporating premium luxury condominiums in its top three floors. It also features a 205-room Marriott City Center and 100-room Residence Inn, retail spaces and a 700-space underground parking garage.
DOWNTOWN PROJECT PIPELINE
TRANSYLVANIA UNIVERSITY
WILLIAM
T. YOUNG STUDENT CENTER
$30 MILLION
97,710 sq. ft. features a dining hall, conference and meeting rooms, fitness center, a bookstore and community outreach areas for student organizations.
2020
THE MET
$24.5 MILLION
A complete interior and exterior renovation now housing a restaurant and bar, the Visitors Center, special event space and offices.
LEX LIVE
$70 MILLION
90,000 sq. ft. entertainment center featuring 10 movie screens, three bars, a bowling alley, an arcade and meeting rooms.
2021
GATTON STUDENT CENTER PHASE I AND EXPANSION
$225 MILLION
364,000 sq. ft. energetic and vibrant hub for student activities featuring many food-service options, a 1,000seat Champions Kitchen, multiple ballrooms, a theater, student organization offices, Alumni Gym, campus bookstore, and the Cats Den.
CENTRAL BANK CENTER
$300 MILLION
Expansion and renovation of convention center and Rupp Arena including contemporary exhibit space, meeting rooms, flexible event space, and new ballroom. Rupp Arena had renovations and upgrades to the upper seating bowl, UK Hospitality club space and expanded concourses.
2022
TOWN BRANCH COMMONS AND TRAIL
$39.5 MILLION
Town Branch Commons is a winding park and trail system that runs through downtown with continuous bike and walking paths connecting new and existing parks including Town Branch Trail and Legacy Trail providing 22 miles of uninterrupted trail.
THE MANCHESTER
$37.5 MILLION
125 room boutique hotel located in the Distillery District featuring, roof top bar, café and salon.
2023
330 NEWTOWN
$41.5 MILLION
108-unit mixed-income development in northeast part of downtown.
GATTON PARK ON THE TOWN BRANCH
$37.5 MILLION
Eleven acre urban park and open space featuring art installations, recreational lawn and water features and a great lawn and stage to host performances.
LINCOLN WEBB DEVELOPMENT
$350 MILLION
Proposed development of the 14-acre High Street parking lot to include grocery store, parking garage, residential, office, hotel and entertainment venue.
FUTURE
325 W MAIN
$25 MILLION
Mixed use development with office, retail, and hospitality venue.
THE HILL BUILDING
$65 MILLION
Former Lexington Herald-Leader will house Fayette County Public schools vocational tech programs.
MOBILITY & TRANSIT
2023 RECAP
Downtown’s walkscore.com measures continue to be very strong. Other mobility and transit sectors such e-scooters show strong utilization. Notably, e-scooter usage shows strong demand during not only the academic year, but also during the Fall and Spring Keeneland meets. Public Transit ridership grew 46%.
WALK SCORE
According to walkscore.com, downtown Lexington scored high in all three categories. In 2023, Downtown’s walk score of 91 earns a rating of “a walker’s paradise”. The downtown bike score of 83 earned a rating of “very bikeable” and the transit score of 73 earned an “excellent” rating.
FAST FACTS
121,226 Lextran ridership at downtown stops
8,391 downtown on and offstreet parking spaces managed by LexPark
91 Walk Score
140,750 e-scooter trips during 2023
25+ miles of bike lanes and trails
Source: walkscore.com
BIKE LANES AND TRAILS
Approximately 3 miles of bike lanes were added in 2023 slated for completion in 2024 bringing the total to nearly 25 miles of bike lanes and trails in Lexington.
MICRO-MOBILITY
E-scooters impact on mobility was clearly demonstrated in 2023. Usage increases significantly during the academic year, and even more so during the Spring and Fall Keeneland meets. In 2023, the number of e-scooter trips decreased to 140,750 trips from almost 220,000 in 2021, however, public transit ridership remains steady. The availability of E-scooters is important to University of Kentucky and downtown because they help people move within these dense areas without having to drive and secure parking.
E-SCOOTERS
TRANSIT
Lextran is the public transit provider with a fleet that includes compressed natural gas, battery-electric, hybrid-electric, and diesel buses. Lextran operates 20 fixed routes, a door-to-door paratransit service and a vanpool/ridesharing program. Regular bus fare is $1.00, and there are a variety of reduced fares and pass programs available to individuals who qualify. All buses are equipped with bike racks and are wheelchair accessible.
LexTran operates 26 bus stops including a transit center in downtown. More people began to use public transit as we emerged out of the pandemic. Lextran ridership increased 46% in 2023 to 121,226 and they expect strong ridership demand to continue in 2024.
LexTran Ridership at Downtown Stops
MOBILITY & TRANSIT
PARKING
In 2023, the total supply of on and off-street parking spaces remained stable with 9,800. On-street meter occupancy usage remains popular, signaling a gradual increase in transient parking activity and stable usage despite a slight increase in parking costs and enforcement until 7pm. The transient off-street occupancy in LEXPARK garages recorded greater occupancy gains but still lag behind pre-pandemic levels.
LEXPARK OCCUPANCY RATES
*Denotes new calculation method
OUTLOOK
Walk and bike scores should remain strong in 2024 and beyond with 26 miles of bike lanes making walking and biking downtown more attractive. E-scooter usage will continue to be popular alternatives to rideshare providing customers another means of non-car transit. A strong pipeline of more conventions, meeting and special events will bring significantly more people to downtown especially given the completion of the $300 million Central Bank Center renovation and expansion.
LIVING & QUALITY OF LIFE FAST FACTS
RECAP
Trends indicate that more working adults are choosing where they live with greater emphasis on areas that provide a high quality of life. Accordingly, Downtown Lexington should continue to attract more people to live because of its density of quality-of-life amenities including strong investments in public spaces and parks. For this reason, there continues to be strong demand in the for-sale and apartment markets. Perhaps the only threat to this trend is the potential misperception of overall downtown safety.
DOWNTOWN SALES OF SINGLE-FAMILY HOMES AND CONDOMINIUMS
According to the Fayette County Property Valuation office, the 2023 top 10 residential sales totaled $7.7 million with an average price of $760,000.00. The 2023 sales show significantly lower than 2020 data with the top 10 sales totaling $12.6 million. The downtown market continues to be challenged with lack of available inventory and higher interest rates.
DOWNTOWN RENTAL MARKET
Downtown enjoys a robust rental market composed of 2,386 market rate apartments, 1,467 affordable housing apartments and 5,769 student housing beds with an average combined 97% occupancy rate. Options range from efficiency to four-bedroom units providing a broad continuum of rental options. While there have been new projects that have recently come on the market, each market segment has high occupancy rates showing the strength of demand for downtown living, the ability to absorb new development and the shortage of downtown rental units.
Housing Apartments
Student Housing (Beds)
LIVING & QUALITY OF LIFE
CRIME RATE
Downtown’s safe environment creates the foundation for a vibrant, clean and successful urban core. In 2023, more people continue to come downtown to go to events, restaurants and bars. As activity increases, some minor crimes have seen a slight increase but overall the environment remains safe and well policed. The Downtown Lexington Management District further augments the police presence in the downtown core with assistance from the sheriff funding additional deputies during peak activity hours. However, downtown’s crime rate remains low.
Source: LEX PD NIBRES Part 1 Crime report
*Data not reported
OUTLOOK
With the opening of Town Branch Commons and Trail, and Gatton Park on the Town Branch projected to open by 2025, 325 W Main, and the Phoenix Park renovation, downtown should become even more active, walkable and bikeable while also providing additional quality park space. New apartment and for-sale projects should further increase downtown’s residential population and continue to increase downtown vibrancy and quality of life.
ACKNOWLEDGEMENTS
Thanks
Discover the B est of B oth Worlds
B est of B oth Worlds
With industr y-recognized exper tise in wealth management, equit y research, asset management and more, we have all the capabilities you’d expect from a big Wall Street firm. But because we’re independent and employee-owned, you can be sure we answer only to you
industr y-recognized exper tise in wealth management, equit y research, management and more, we have all the capabilities you’d expect from a big Wall Street firm. But because we’re and employee-owned, you can be sure we answer only to you
Visit bairdwealth.com and discover the di erence Baird has been making for clients since 1919.
Visit bairdwealth.com and the di erence has for since 1919.
Baird
Baird
10 0 W Main Street, Suite 500 Lexington, K Y 40507
10 0 W. Main Street, Suite 500 Lexington, K Y 40507
859 -255-9681
859 -255-9681