NETAR CMLS Blog
A musical chairs situation for Kingsport apartments: What the Johnson City and Bristol markets look likeKingsport will likely be the softest apartment market in the Tri-Cities for a while due to the volume of new product that has and is coming online in that community. It has created a sort of a "musical chairs situation" between some new complexes that have comparable rents to the 30 and 40-year old complexes. At the same time the apartment supply and demand in the Johnson City and Bristol areas is more balanced. That was one of the takeaways from Universal Development & Construction Principal Shane Abraham's market briefing at a Northeast Tennessee Association of Realtors® (NETAR) Commercial Multiple Listing Service (CMLS) meeting this week.
Abraham outlines the apartment market landscape.
Abraham is a regional leader in the multifamily development and property management industry and his insights offer a valuable inside look at both the history and future of that industry in the Tri-Cities region. His comments were made for an audience of almost 40 NETAR commercial and residential Realtors®, local bank and credit union lenders and representatives from other real estate professions. It was one of the events that are part of a CMLS project funded by a National Association of Realtors® (NAR) grant to further community knowledge about commercial real estate and its role in the economy of Northeast Tennessee.
Kingsport has seen an influx of apartment product in the past year, and there are another 700 new units that will be hitting the market in the next 24-26 months. Abraham said if there is little new population "most of the stabilization will occur from attrition." There are people coming out of leases in Kingsport's 30 and 40-year old complexes who are moving over to the new apartments that have comparable rents. "It's sort of like musical chairs." How this affects the current occupancy levels of the B and C products - how the new A class products fill up and who feels the pain remains to be seen. "It will be interesting to watch."
The Bristol Market seems balanced, but recent lease-ups were slower than 2014-2015 lease-ups. That market also saw very little if any population growth, he said.
The Johnson City absorptions have definitely slowed over the last 10 years with well over 2,000 new units built. Most properties still seem to be meeting national average occupancies, but there may still be pockets for small product success. Little new market supply will hopefully allow time for the market to tighten somewhat.
The full report can be found on the NETAR Web site at: