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Appraisal Regional Analysis of
The subject is influenced in a general manner by the economic, political, physical and social
characteristics of the Louisville Metropolitan Statistical Area (MSA). A MSA is a geographic area with a
significant population nucleus, along with any adjacent communities that have a high degree of
economic and social integration with that nucleus. Louisville is part of a metropolitan statistical area that
includes Jefferson County, Bullitt County, Oldham County, Trimble County, Meade County, Shelby
County, and Nelson County in Kentucky, and three Indiana Counties including Clark, Harrison and Floyd.
The value of real property is influenced by the interaction of four basic forces. These forces include
social trends, economic circumstances, environmental conditions, and governmental controls and
regulations. The interaction of these four forces influences the value of every parcel of real estate in the
Social forces are trends that are exerted primarily through population characteristics. Real property
values are affected not only by population changes and characteristics, but also by various forms of
Population and Area
Population growth trends influence employment growth, income levels, and many other key demand
parameters analyzed in determining commercial real estate productivity.
As shown, the Louisville MSA comprises nearly 30% of the entire population of Kentucky. Both the MSA
and the state have shown steady growth. Population growth tends to be a positive indicator for real
Institutions of higher learning typically are not as vulnerable to economic downswings, and they help to
provide an area with a more solid employment base. Noted universities and colleges in Metro Louisville
are the University of Louisville, Jefferson Community College, Sullivan University network, Bellarmine
University, Louisville Technical Institute, Louisville Presbyterian Theological Seminary, Spalding
University, Indiana University Southeast, and Indiana Vocational Technical School.
Recreational and Regional Attractions
Recreational and regional attractions enhance an area’s quality of life. These activities may also have a
significant economic impact on an area by increasing the demand for services and retail trade created
Cultural sites in Metro Louisville include the Louisville Science Center, and My Old Kentucky Home State
Park (in nearby Bardstown). The Louisville Slugger Museum, Slugger Park (home of the Louisville
Riverbats minor league baseball team), the Falls of the Ohio Museum, the Kentucky Center for the Arts,
the Louisville Zoo, Freedom Hall, and Churchill Downs, home of the Kentucky Derby.
Louisville is home to a number of annual cultural events. Perhaps most well-known is the Kentucky
Derby, held annually during the first Saturday of May. The Derby is preceded by a two-week long
Kentucky Derby Festival, which starts with Thunder Over Louisville, the largest annual fireworks display
in the nation. In September is the Bluegrass Balloon Festival, the fifth largest hot air balloon festival in
the nation. The suburb of Jeffersontown is also the home of the annual Gaslight Festival, a series of
events spread over a week. The month of October features the St. James Court Art Show in Old
Louisville. Thousands of artists gather on the streets and in the courtyard to exhibit and sell their wares,
and the event is attended by many art collectors and enthusiasts. Another art-related event that occurs
every month is the First Friday Trolley Hop. A TARC trolley takes art lovers to many downtown area art
galleries on the first Friday of every month. The West Main District in downtown Louisville features what
is locally known as "Museum Row". In this area, the Frazier International History Museum features a
collection of arms, armor and related historical artifacts spanning 1,000 years, concentrating on U.S.
and UK arms. Also nearby is the Louisville Science Center, which is Kentucky's largest hands-on
science center and features interactive exhibits, IMAX films, educational programs and technology
networks. The Speed Art Museum is the oldest and largest art museum in the state of Kentucky.
Located adjacent to the University of Louisville, the museum features over 12,000 pieces of art in its
permanent collection and hosts regular temporary exhibitions.
Louisville Metro has 122 city parks covering more than 14,000 acres (57 km²). Several of these parks
were designed by Frederick Law Olmsted, who also designed New York City's Central Park as well as
parks, parkways, college campuses and public facilities in many U.S. locations. The Louisville Waterfront
Park is prominently located on the banks of the Ohio River near downtown, and features large open
areas, which often feature free concerts and other festivals. Cherokee Park features a 2.6-mile (4.2 km)
mixed-use loop and many well-known landscaping features. Other notable parks in the system include
Iroquois Park, Shawnee Park and Central Park.
In development is the City of Parks, a project to create a continuous paved pedestrian and biking trail
around Louisville Metro while also adding a large amount of park land. Current plans call for making
basically the entire 1,600-acre (6 km2) Floyds Fork flood plain in eastern Jefferson County into park
space, expanding area in the Jefferson Memorial Forest, and adding riverfront land and wharfs along
the Riverwalk Trail and Levee Trail. Some of the new park system has been opened.
College sports are very popular in the Louisville area, especially college basketball. The Louisville
Cardinals have recently built a new basketball stadium in downtown Louisville that was completed in
Louisville has six professional and semi-professional sports teams. The Louisville Bats are a baseball
team playing in the International League as the Class AAA affiliate of the nearby Cincinnati Reds. The
team plays at Louisville Slugger Field at the edge of the city's downtown.
Downtown Louisville has undergone a revitalization project that includes both public and private
investment. Numerous projects that have been completed including the building of Slugger Field,
Riverfront Park, 4th Street Live, the new construction of the Louisville Cardinals Stadium, as well as a
project that was just completed to expand 4th Street Live. Market Street has also undergone a major
revitalization that includes numerous new bar and restaurant establishments that has been classified as
the NuLu District. The NuLu District is a fast growing sector of downtown that has become very popular
with the city.
Overall, the Louisville area has an excellent mix of cultural and recreational attractions.
Economic forces are the fundamental relationships between current and anticipated supply and demand
and the economic activities in which the population participates in order to satisfy its wants, needs, and
demands through its purchase power.
The major employers of Louisville are consistent with the sector employment shown above. The chart
below lists the 20 largest private employers. It is noted, that the government and school systems make
up a large component of the area employment.
Of note for the industries and employment in the region is that in late 2010, Aegon announced that it
was consolidating offices and would downsize its Louisville operations by 300 people. Ford on the other
hand announced it would increase its work force by 1,300 people.
The following chart shows the historical unemployment rates for the MSA, state, and US from 2000 to
August 2013. Current local and state levels (July 2013) are 8.2% and 8.5%, which is considerably
higher than the national average of 7.3%.
Environmental forces are both natural and manmade forces that influence real property values. Some
environmental forces include climactic conditions, natural barriers to future development, primary
transportation systems, and the nature and desirability of the immediate areas surrounding a property.
Highway accessibility is a primary consideration in planning an area’s future growth and development.
The Louisville metropolitan area is accessed via three different interstate highways. I-64 is a major east-
west corridor, capable of delivering goods to the East or West Coasts. St. Louis lies to the west on I-64;
West Virginia is accessible to the east. I-65 is a major north-south corridor, connecting Louisville with
Indianapolis, IN and Chicago to the north, and Nashville, TN and Montgomery, AL to the south. I-71 is a
regional interstate highway that connects Louisville with Cincinnati, OH, as well as I-75, which services
not only major points in Ohio but all major points between Detroit, MI and Florida. Regionally,
Indianapolis, Cincinnati, and Nashville are all within a three-hour drive.
Louisville’s central location in the eastern United States, gives it the claim that over 50% of the
United States Population can be reached within a one day drive. This makes Louisville and ideal
location for distribution.
Louisville's main airport is the centrally located Louisville International Airport, whose IATA Airport Code
(SDF) reflects its former name of Standiford Field. The airport is also home to UPS's Worldport global
air hub. UPS operates its largest package-handling hub at Louisville International Airport and bases its
UPS Airlines division there. Over 3.5 million passengers and over 3 billion pounds (1,400,000 t) of cargo
pass through the airport each year. Louisville International Airport is also the 4th busiest airport in the
United States when in cargo passage, and it is the 11th busiest in cargo passage in the world.
The Ohio River provides an avenue for water transportation, which includes a considerable amount of
barge traffic. The Ohio River connects with the Mississippi River in St. Louis to the west and the
Allegheny River in Pittsburgh, PA to the east.
Public transportation consists mainly of buses run by the Transit Authority of River City (TARC). The
city buses serve all parts of downtown Louisville and Jefferson County, as well as Kentucky suburbs in
Oldham County, Bullitt County, and the Indiana suburbs of Jeffersonville, Clarksville and New Albany.
Louisville is served by two major freight railroads, CSX (with a major classification yard in the southern
part of the metro area) and Norfolk Southern. Five major main lines connect Louisville to the rest of the
region. Two regional railroads, the Paducah and Louisville Railway and the Louisville and Indiana
Railroad, also serve the city.
The Louisville area enjoys a distinct four-season year. The topography is generally green, lush, and
moderately hilly. Humidity is usually fairly high, even in cold temperatures. Winter temperatures
normally range from mid-teens to mid-40s. Summer temperatures range from 70s to low 90s. Annual
precipitation is moderate to heavy in volume and heaviest during late winter and spring
Governmental, political and legal actions at all levels have an impact on property values. The legal
climate of a particular time or in a particular place may overshadow the natural market forces of supply
Our review of the above data indicates that the Louisville MSA has historically enjoyed a relatively stable
economy, evidenced by a historical pattern of increasing income levels, a steady creation of new jobs,
and relatively low unemployment rates. However, Louisville, similar to rest of the nation has recently
experienced set-backs due the national and global recession. The area has experienced increasing
foreclosures, increasing unemployment, and has had other recessionary effects. This has mostly
passed, but the long-term lingering effects of this economic calamity continue as both the city and
country move forward into the future.
In comparison to the greater Midwest Region, the Louisville economy is faring better than comparable
markets. Louisville saw smaller growth and a less intense boom prior to the recession that started to
take its effects in late 2007 and 2008 through now. And because the area was not over-built to the
degree as many other parts of the Midwest and Nation, the decline has not been as drastic as seen
In conclusion, the economic outlook for the Metro Louisville MSA is favorable for the long term overall
success of the subject. In the short term, increased unemployment, increased foreclosures, tighter
lending standards, and more risk averse buyers have led to higher capitalization rates even though the
operating performances of most apartments is superior as there are higher occupancy levels, less rent
concessions, and stable to increasing rent levels. This process has started to reverse as the economy
has stabilized and the unemployment rate has declined. Historically low interest rates have spurned
growth in the housing sector while apartment vacancies have declined and rents have shown a marked
increase. Regardless, the economic trends suggest that investment and economic activity is increasing
and should continue into the future.
SUBJECT MARKET AREA AND ANALYSIS
Neighborhood is defined as follows: A group of complementary land uses; a congruous grouping of
inhabitants, buildings, or business enterprises.
The subject is located in east Clark County, Indiana in Charlestown Township. This location is 1.6 miles
north of Charlestown, Indiana. Access to I-65 is available 7.3 miles to the west via Highway 403 and U.S.
31, at Exit 9 in Sellersburg. I-265 can be accessed 7.15 miles southwest at its I-65 junction. Secondary
roads in the area include SR 403, U.S. 31 to the west, and SR 160 to the east.
The 2000 population of Charlestown was 5,993, with a median age of 32.0 years. By 2007 the
population had grown to 7,227, representing 7.0% of the Clark County population. From U.S. Census
figures, Charlestown household income average $41,257 in 2007.
Leading Southern Indiana employers include American Commercial Lines (Jeffboat), Horseshoe
Southern Indiana and Floyd Memorial Hospital. All are easily accessed from the subject’s location near
Charlestown due to the proximity of Interstate-65, I-265, and the extensive network of secondary roads
in the area.
Charlestown is a small Clark County town, historically surrounded by agricultural land, but with new
commercial and subdivision development influencing the community. Charlestown Landing is a 77,000
acre mixed-use development on Highway 62 at Charlestown State Park. This major development is
located northeast of River Ridge Commerce Center and will feature a Clark Memorial Hospital site, 56
single family residential lots, and nearly 23.0 acres of commercial development.
New development in the subject’s immediate area includes Hawks Landing, with over 150 one-half to two
acre lot homes starting in the low 200’s, located off Stoney Point on Charlestown-Memphis Road.
Developer Dan Christiani of 403 Properties LLC, is seeking Sellersburg sewer access for a maximum of
35 single-family patio homes along Old Ind. 60. Serenity Oaks is off of Bethany Road 2.0 miles
southeast of the subject and features 1.0 + acres lots with homes starting in the low 300’s, and Danbury
Oaks Sections 1 and 2 is located less than a mile southeast of the subject.
According to representatives of Clark County Planning and Zoning, heavy residential development is
welcomed in their community when developers are willing to assume the burden of infrastructure
improvements. The nearest possible sewer hookups are at either SR 403, or the Charlestown-Memphis
Road/Stoney Point intersection, each slightly over 1.0 mile away. According to the property owner, Mr.
Gary Brinkworth of Brinkworth Engineering has estimated the cost of engineering and construction for
sewers in either direction would run about $250,000. Mr. Tony Semones of Clark County Planning and
Zoning believes a development the size of that planned by the subject’s owner would require R-2
zoning, 9,600 SF per lot, and three or more 75’ separate entrances to county roads with divided
A 750 home development has already been approved 3.0 miles north of the subject at Hansbury Road
off the Memphis exit, and it is likely that the subject also will one day be developed as a 225 +/- home
site residential subdivision. Such massive subdivision projects do not bode well for immediate
development. From conversations with area real estate brokers it appears obvious that development in
the area has been stalled by the economic downturn of late 2007 to the present, and that subdivision
land purchases made several years ago are still sitting undeveloped due to a current lack of demand.
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