Appraisal Regional Analysis of

Lexington-Fayette, Kentucky


The subject is influenced in a general manner by the economic, political, physical and social
characteristics of the Lexington-Fayette 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. The Lexington-Fayette Metropolitan
Statistical Area covers six counties in the state of Kentucky.  These counties include Fayette, Scott,
Woodford, Bourbon, Clark, and Jessamine.

Lexington is located in the central portion of the State of Kentucky.  Lexington is located 70 miles west
of Louisville, 20 miles southeast of Frankfort, the state Capital of Kentucky, 70 miles south of
Cincinnati, Ohio, 150 miles west of Charleston, West Virginia, and 150 miles north of Knoxville,

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 market.

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
human activity.

Population and Area Growth
Population growth trends influence employment growth, income levels, and many other key demand
parameters analyzed in determining commercial real estate productivity.  The table below shows the
population in the Lexington MSA in comparison with the State of Kentucky and the United States.  
Historical data, as well as projections, are shown.  The MSA population is steadily increasing faster
than both the state of Kentucky and the United States.  These trends are expected to continue as
indicated by the 2014 population projections.  The chart is shown below.

Local Economy:        The Bluegrass is the financial, educational, retail, health care, service, and cultural
center of Central Kentucky.  Lexington-Fayette County is the merged urban county government
centered among an eight county alliance, which represents the Bluegrass Region.  The local economy
is centered on the horse industry, healthcare, technology, and higher education.  In 2008 there was
more than $750,000,000 in horse sales.  

The world headquarters of Lexmark International is located in the MSA as well as IBM and Hewlett-
Packard facilities, and a thriving biosciences community.  

The healthcare industry is the leader in economic growth in the area with all three major hospitals in
Lexington planning or has started expansions at their current facilities.  The UK Chandler Medical
Center and 7 other colleges in the area are involved in medical related instruction.  

Higher Education:        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.  The area is
anchored around the University of Kentucky, and there are 10 colleges or universities within 40 miles
of Lexington.  In this area over 65,000 students are enrolled and graduating 12,000 annually.  Census
data for 2007 ranks Lexington as the 11th most highly educated city in the nation for cities with a
population over 250,000.  Also when high school graduates are considered Lexington is the second
most educated workforce in the nation with Seattle, Washington ranking first.

Recreational and Regional Attractions
Recreational facilities and regional attractions enhance an area’s quality of life and generate additional
employment.  The Lexington MSA offers numerous historical, cultural, and recreational options for
both residents and visitors.

Lexington is home to many thriving arts organizations including a professional orchestra, two ballet
companies, professional theatre, and several museums including a basketball museum, several choral
organizations and a highly respected opera program at the University of Kentucky. In addition, there
are several events and fairs that draw people from throughout the Bluegrass.

Mayfest is a free outdoor festival that takes place annually over Mother's Day weekend. Held in Gratz
park between the Carnegie Center and Transylvania University, the festival typically features up to 100
art and craft booths, live entertainment throughout the weekend, food, children's activities, adult
activities and literary events, free carriage rides, a traditional Morris and Maypole dance and various
Taking part the first full weekend of June is the Festival of the Bluegrass, Kentucky's oldest bluegrass
music festival. It includes three stages for music and a "music camp" that teaches the bluegrass music
to school children. Also in June is the popular Broadway review presented by UK Opera Theatre, "It's A
Grand Night for Singing!"

Lexington has over 100 parks ranging in size from the 0.20-acre Smith Street Park to the 659-acre
Masterson Station Park.  There are also six public golf courses at Avon, Kearney Links, Lakeside,
Meadowbrook, Tates Creek and Picadome.

Lexington is home to two historic horse racing tracks. Keeneland; which has sported live races in April
and October since 1936, and The Red Mile Harness Track, the oldest horseracing track in the city, and
second oldest in the nation. The Kentucky Horse Park, located along scenic Iron Works Pike, is a
relatively late-comer to Lexington, opening in 1978. It is a working horse farm and an educational
theme park.

The University of Kentucky is by far Lexington's most popular sports team. The school fields 22 varsity
sports teams, most of which compete in the Southeastern Conference. The Kentucky Men's Basketball
team has won 8 NCAA Championships and is the winningest program in college basketball history.
Lexington's only other collegiate team; the Transylvania University Pioneers compete in NCAA
Division III athletics.  Lexington is also home to the Lexington Legends, a Class A minor league affiliate
of the Houston Astros.

There are numerous parks and attractions in Winchester, the site of the subject as well.  The Bluegrass
Heritage Museum is located in Winchester.  Housed in the historic Guerrant Mission Clinic and Hospital
in Winchester, the Bluegrass Heritage Museum examines regional history through engaging and
innovative exhibits and the Leeds Center for the Arts was built in 1925, and renovated in the mid 1980’
s.  This theater offers cultural and community events including plays, musicals, concerts, classes,
seminars and children’s programming.
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.  

Sector Employment

The chart below compares the employment composition of the Lexington area with that of the state of
Kentucky.  Total employment is broken down into the following sectors:  Mining, Construction,
Manufacturing, Trade, Transportation, Utilities (TTU), Information, Finance, Insurance, Real Estate
(FIRE), Services, and Government.  
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