Commercial real estate has best month so far this year
Tri-Cities commercial real estate posted its best month so far this year in May. There were 59 transactions. Last year there were 25. So far this year there have been 226 transactions, up from 141 during the first five months of last year.
“The commercial marketplace is gaining a recovery status foothold,” according to Cassie Petzoldt, Northeast Tennessee Association of Realtors (NETAR) Commercial Committee Chair. “It’s not as hot as the residential or rental markets that are basically price-driven, but it is active and gaining momentum. There’s actually a lot more activity that can be seen from just the transactions data. And some of the data – especially the year-over-year comparisons – are distorted because they’re gauging today’s recovering market to last year’s pandemic-stricken market. May and June were the bottom of the last year’s activity after the April pandemic driven crash.”
Retail-Commercial Sector deals led local transactions for the second month as the retail and hospitality sectors began stirring back to life. So far this year, there have been 39 sales and leases in that sector. That sector is struggling with a labor shortage that’s holding back full operations at some firms.
There were seven Office Sector transactions, which have been the most active so far this year, in May. That sector peaked in March and has plateaued at seven deals a month since then. So far this year, there have been 41 Office Sector sales and leases, 28 more than during the first five months of last year.
Vacant commercial and residential land deals were steady with 205 transactions. That’s 464 more than the first five months of last year. Vacant land continues to dominate the regional listings. Inventory has remained steady and ranged from 158 listings in January to 169 in May.
The transactions increase has taken a bite out of the active inventory. There were 810 active listings at month’s end, down from 846 in April and 900 during May last year.
New listings were also slightly down from April and total 212 so far this year. That’s four more new listings than May last year and 54 fewer than the first five months of last year.
The three sectors where transactions have cut into active inventory the most are office, retail-commercial, and shopping center.