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Downtown Lexington Partnership (DLP) hosted its fourth-annual State of Downtown report, presented by Republic Bank, on June 29 at LexLive in downtown Lexington. The event was attended by more than 150 downtown stakeholders, real estate and economic development professionals, council members and other community leaders.
The data presented showed that downtown made a strong comeback in 2021 compared to the previous year. While still not reaching pre-pandemic levels, there was a surge in most market segments.
Terry Sweeney
Terry Sweeney
Economic indicators showed strong growth in the customer base, including the return of office workers, visitors, students and people attending events. The commercial real estate market showed strong sales, a stable office market, increased property values in the urban core, a net growth in street-level merchants and a strong pipeline of projects that will continue to transform downtown.
Mobility and transit benchmarks also rose across the board. Most impressively, eScooter trips tripled in one year. While public transit ridership and on-street and off-street parking occupancies also increased, they did not return to pre-pandemic levels.
Finally, living and quality-of-life benchmarks were highlighted by strong home sales and rental markets driven by the critical mass of attractive amenities and neighborhoods.
Here are several highlights from the report.
Customer base
Lexington’s downtown hosted 59,000 convention delegates in 2021, up 28,000 or 110 percent from the pandemic-plagued 2020.
Similarly, ticketed and gated hospitality and cultural attractions increased 47 percent to nearly 900,000. In addition, DLP and other organizations hosted 168 event days, attracting 314,000 people, a 58 percent increase compared to 2020. Finally, downtown recorded 5.7 million visits, up 63 percent from 2020.
Commercial real estate
Downtown’s commercial real estate market continued to rebound and grow in 2021 as the pandemic receded. Twenty-six new street-level merchants, bars, hospitality and food-service businesses opened in 2021, with a net gain of seven new businesses in one year and a total of 54 new businesses since 2017.
The total value of real estate in the urban core grew by 4.4 percent to more than $502 million and has increased by more than $96 million, or 23.6 percent, since 2015. In addition, the pipeline of new projects underway or announced increased to $1.5 billion, while more than $2.4 billion have been completed since 2015. Finally, the downtown office leasing market remained stable and recorded an overall vacancy rate of 11.67 percent.
Mobility and transit
Downtown’s mobility and transit benchmarks surged in 2021. EScooters led the way with 220,000 trips in 2021 — three times the number of trips in 2020 and doubling in 2019, the year eScooters first entered the Lexington market.
According to walkscore.com, downtown’s walk score increased slightly from 91 to 93, earning a rating of “a walker’s paradise.” A cycling score of 83 also earned a rating of “very bikeable.”
Lextran ridership increased 5 percent in 2021 to 77,000. Still, ridership remains significantly lower than pre-pandemic levels while parking meter occupancy increased 3 percent from 2020, signaling a gradual increase in transient parking activity as the pandemic began to subside.
Living and quality of life
Post-pandemic trends indicate that more working adults choose to live where there is a high quality of life. Accordingly, downtown Lexington should continue to attract people to live here because of its density of quality-of-life amenities. For this reason, there continues to be strong demand in the for-sale and rental markets.
The top 50 residential sales totaled $43.6 million, an average of $872,000. The total sales were significantly higher than $29 million the previous year.
Downtown continued to have a strong rental market composing 3,965 market-rate apartments, affordable housing apartments and student housing. Each apartment segment recorded high occupancy rates equaling or exceeding 95 percent, even as new developments came online in the past 24 months.
Downtown’s future
In the short term, downtown’s growth should continue, though how quickly depends on the continued return of office workers, a return to normal consumer spending habits and how public safety is maintained. Looking further ahead, recently completed large-scale projects like City Center and Central Bank Center — as well as future projects like the Manchester Hotel in the Distillery District and the proposed $350 million Lincoln Webb development on High Street — will continue to drive growth.
Workforce housing projects and incubator and co-working spaces will enhance downtown’s entrepreneurial environment and inclusiveness, while projects like Town Branch Commons and Trail and Town Branch Park will connect our downtown and leverage these public and private investments to create a vibrant urban core.
To read the entire State of Downtown Report, visit downtownlex.com.
Terry Sweeney has more than 25 years of downtown revitalization experience. He has served as president/ CEO of the nonprofit Downtown Lexington Partnership since 2018. In July, Sweeney announced he would be moving from the organization to assist his wife in caring for her ill parents in Indiana. “Besides new programs and vision for the organization, I am proud of how we provided much-needed financial support for downtown businesses during the pandemic,” Sweeney said. “I am also proud to leave the organization in a better financial position with a strong balance sheet. Most of all, I am thankful for the support of our passionate and dedicated board and staff.”