Optimism, momentum increases for Tri-Cities commercial real estate market

Local Commercial Realtors are more optimistic about the Tri-Cities market than some of the data supports. But some of that enthusiasm is based on momentum that won’t show up until Q4 reports are available.

One Tri-Cities data bright spot is commercial lease transactions reported by the Northeast Tennessee Association of Realtors (NETAR) Commercial Multiple Listing Service (CMLS).  During the first nine months of this year, there were 94 lease transactions of CMLS properties. That’s a 27% increase from last year and the best three-quarter performance since 2016. Lease transactions in 2017 were the previous nine-months best at 91.

Shopping Center leases topped this year’s Q3 year-to-date total with 33 leases followed by 20 leases of office properties. There were 13 leases for industrial properties and 17 retail-commercial.

Commercial sales had a good third quarter – up 3% from last year- but the 370 sales during the first three quarters were 2.9% below last year, and the sales volume of $177.4 million was 31.7% less than the same period last year. That data comes from the Appalachian Highlands Dashboard for Real Estate Analytics – a new venture by Don Fenley, supported by TechPoint’s Austin Ramsey and TCI Group’s Nina Heffner, and underwritten by Jerry Petzoldt TCI Lifestyle Investments.

The Dashboard’s year-to-date report shows there have been two multi-million sales and 30 million-dollar-plus commercial sales so far this year.

Sales for all real estate properties so far this year total 8,927 (down 0.6% from last year) with a total sales volume of $1.4 billion (down 3.7% from last year). The first nine months of last year was the strongest period since 2016 with 8,982 sales with a total sales volume of $1.5 billion.

There were 450 new commercial building permits for the seven-county Tri-Cities region during the first three quarters, a 14.7% increase from last year, according to The Market Edge’s Q3 Commercial Permit Trends Report. The $189 million permit value is a 3% increase from the same period last year.

Only two of the four area metro regions reported more permits and higher permit values so far this year. The Knoxville region’s permit total was up 3.7% and the value was up 14%. The Chattanooga and Asheville regions had double-digit declines in the number of permits and permit value.

Washington Co. TN and Sullivan Co. permits dominate the report since they are the region’s largest markets. Washington and Greene counties recorded the biggest increase in permits so far this year. Washington Co. posted 41 more permits than last year while Greene Co. recorded an increase of 16 permits. The largest gain in permit value compared to the first nine months of last year was Washington Co. ($72.4 million, up 59%) and Hawkins Co. ($2.1 million up 164%.) Sullivan Co. has the highest permit value for the period ($76.2 million, up 17% from last year).
Four local commercial practitioners size up the market and coming year CLICK HERE