Multi-family sales heat up commercial market
GRAY, Tenn. – Tri-Cities commercial real estate transactions were almost 11 percent better than the first seven months last year. July’s sales and leases were the same volume as July last year.
The biggest change in asset classes has been multi-family transactions from the Northeast Tennessee Association of Realtors (NETAR) Commercial Multiple Listing Service (CMLS). They have increased from two last year to 15 so far this year. Data on multi-family Flex commercial listings are not included in that total since that service does not segment listings by class. The surge also doesn’t include investor purchases from listing of large national services.
Multi-family housing has become the commercial real estate hot ticket, said NETAR President Rick Chantry. It is being driven by new household formations by locals and new residents moving to the area that’s in the grip of a housing shortage.
The local multi-family vacancy rate is lower than the national average and the second lowest in East Tennessee, Chantry added. That’s driving local rents higher. Some one-bedroom rents have increased by as much as 50 percent from pre-pandemic levels.
Office deals continue leading transactions while retail and commercial sales and leases show the most consistent growth rate. Although they are not at the same level as office and retail-commercial, vacant land sales continue with higher volume than last year.
Active inventory is down 21.8 percent from last year, while new listings are down 7.3 percent. Web listing views are up 21 percent, and the volume of our-of-area investor inquiries is up.
Despite higher interest rates and the potential for more of the same, local commercial real estate has seen successes this year. Although the forecast varies among asset classes, the overall market outlook remains positive heading into the year’s second half.
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 1,600+ 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