Is a Hotel the Missing Link for South Louisville
When Louisville-based Capstone Realty Inc. bought 300 acres off Preston Highway near the Gene Snyder Freeway more than a dozen years ago, the area could have been aptly described as an economic wasteland.
“There was nothing here,\” Stan Franczek, Capstone\’s president and CEO said during a recent discussion about the South End with Louisville Business First.
Apex on Preston, a South End Louisville apartment complex that should be finished by December, has brought some prestige and upscale amenities to the Preston HIghway corridor near Bullitt County. Now some developers and real estate agents are holding out hopes for a hotel.
Also sitting in on that discussion were Suzanne Cheek, a real estate agent with Horizon Commercial Realty, and Kelli Lawrence, a partner with Indianapolis developer Cityscape Residential.
\”The land that we bought was 300 acres of — it wasn\’t even farmland — it was mostly just abandoned grass and weeds,\” Franczek said. \”There was no Home Depot. There were no cinemas. There were no restaurants, and there were no class A apartments.\”
That last factor has changed with the opening of Apex on Preston, a 312-unit apartment complex near Capstone\’s property that will be fully finished in December, a more than $30 million investment by Cityscape Residential.
Capstone\’s south Louisville property, of course, is now known as Commerce Crossings, an expansive business park on 325 acres with 21 buildings, nearly 3.4 million square feet of space and about 30 or so employers. Nearly 4,000 people work there.
Notable tenants at Commerce Crossing include Louisville-based Yum! Brands Inc., global information technology firm NTT Data, California-based Electronic Arts< Inc., also known as EA Games, and JP Morgan Chase Co.
Franczek said the infusion of new retail businesses and the upscale apartment complex make it easier to showcase Commerce Crossings to potential tenants, many of whom ask about housing and retail amenities as they search.
High demand, low vacancy
Cheek said the retail sector has taken off on the Preston HIghway corridor near the Bullitt County line largely because of Commerce Crossings. The business park also was a big draw for Cityscape Residential, which is looking to make more investments in Louisville.
Apex on Preston was Cityscape\’s first project in Louisville, but it also is building Axis on Lexington, a 300-unit apartment complex on Lexington Road across Headliner\’s Music Hall that is a $45 million investment.
In south Louisville, Cheek said, \”if you look at the retail components out here, there is a very low vacancy rate in retail and a lot of demand.\”
Restaurant brands such as Zaxby\’s, Chili\’s and Culver\’s are a stone\’s throw from Apex\’s main entrance, and you can find other fast-casual chains along Preston Highway.
Cheek said the large national retailers in the area, such as Kohl\’s and Wal-Mart, draw more retail interest.
“You’ve got a lot of big boxes here that other retailers want to cluster around,\” she said.
The only drawback she sees is a lack of available land. Cheek said she is working with one retailer that would be new to Louisville to find a site land in the area and is \”turning over every possible rock\” for a location.
Franczek echoed Cheek.
\”I think Commerce Crossings could be 600 acres and be successful if the land was here,\” he said. \”There simply isn’t any more viable, available land.\”
The missing link
But while land might be scarce near the I-265 interchange at Preston Highway, not all options have dried up. Franczek said there a few parcels left, and he believes one or more of them could be used to bring a hotel to the area.
With retail, restaurants, office space and apartments all available on the Preston Highway corridor, a hotel is the one missing component that could drive even more traffic to the area, Cheek said.
Lawrence said she also would like to see more diversity in dining options on the South End, while Cheek said a quality convenience and gas retailer would be welcome near Commerce Crossings.
Lawrence said she hopes the emergence of Apex on Preston, now 65 percent leased, will turn the heads of restaurateurs and hoteliers and bring the South End more looks.
\”The way things are developing,\” she said, \”we see this area as just getting richer and richer in terms of amenities.\”
Marty Finley covers economic development, commercial real estate, government, education and sports business.