Local commercial real estate up 44.1%
November’s regional commercial real estate market continued its recovery momentum with a 44.1% increase over last year’s transaction performance. So far this year, all but one sector has surpassed market performance during the first 11 months of both 2020 and 2019.
“So far this year, the market has recorded 512 transactions – 191 more than last year,” according to Cassie Petzoldt, Northeastern Tennessee Association of Realtors (NETAR) Commercial Committee chair. “Since late summer, the retail sectors – both commercial retail and shopping center – have seen leases and sales gaining strength. It hasn’t outperformed activity in the office sector, but grouped they account for 41% of all transactions so far this year.”
Office transactions have been steady all year. The sector’s performance is counter to what is being reported on national sources. Most of that data is based on the top metro regions and doesn’t include drill-down to the rural metro markets. So far, there have been 87 office sales and leases from NETAR’s Commercial Market Listing Service (CMLS). The second local commercial database does not segment commercial listings or transactions.
A Cushman and Wakefield report suggests that most companies will employ a hybrid office model and the full impact on the future demand for office space is still a question mark. A third-quarter Crexi market analysis says secondary and suburban centers have driven a significant amount of office leasing.
There were 44 office listings in the three-county Johnson City Metropolitan Statistical Area (MSA) at the end of November and 40 in the four-county Kingsport Bristol MSA. The Kingsport-Bristol inventory has averaged 53 listings a month, while Johnson City has averaged 43.
The retail-commercial sector has posted 81 CMLS transactions so far this year. They are evenly divided between the Kingsport-Bristol and Johnson City metro areas.
The CMLS inventory in the industrial sector has dropped from a monthly average of 21 listings to 16. Demand – there have been 49 transactions this year – has depleted much of the inventory, and there has not been much new product added in the past several years even though there is a lot of warehouse demand among companies competing for the growing “last-mile” capacity.
Vacant land sales have also remained constant so far this year. So far this year, that sector has accounted for 40 transactions from both local commercial databases. The monthly average listings volume of 163 was down to 147 in November.
Last month, there were 48 new commercial listings, down two listings from last year and 25 fewer than October’s new listing.
Last month’s active inventory was 766 listings, down 7.2% from last year.
NETAR is the largest trade association in the Northeast Tennessee, Southwest Virginia area representing over 1,500 members and 100 affiliates involved in all aspects of the residential and commercial real estate industries.
NETAR is the voice for real estate in Northeast Tennessee. It is the largest trade association in the Northeast Tennessee, Southwest Virginia region, representing over 1,800+ members and 100+ business partners involved in all aspects of the residential and commercial real estate industries. Weekly market reports and information for both consumers and members are available on the NETAR website at https://netar.us