Office, industrial, vacant land deals best CMLS performers
The local commercial real estate market is slowly clawing itself out of the COVID-19 black hole. Recovery continues to be uneven, with retail and hospitality properties taking the biggest hits. The market lags last year by 3.7%, but November transactions, listings traffic, and total listings increased.
Last month’s transactions were 21.4% better than last year. This year, there have been 313 transactions compared to 325 during the first 11 months of 2019.
“The commercial market is looking better than some expected it would be in this pandemic economy. November transactions made a strong gain. Listing traffic is higher, and that shows investors are shopping for opportunities,” said Cassie Petzoldt, chair of the Northeast Tennessee Association (NETAR) of Realtors Commercial Committee.
There were 825 listings on NETAR’s Commercial Market Listing Service (CLML) and the regional Multiple Listing Service (MLS) at the end of November. That is a 1% increase from October. Compared to November last year, it is down 3.6%.
CMLS listing traffic was up 32.4% from October. The MLS commercial market summary does not monitor listing traffic. Sales and leases for office properties continue to lead CMLS activity in November. They were 11.1% better than last year. Industrial transactions were the second-best performing sector with a 22.2% increase over last year. Vacant land sales were up 9.5% from last year. While the retail-commercial sector has the weakest performance so far this year (down 36.7%), it had the second-highest number of transactions at the end of November. Shopping Center sector sales and leases were down 24.9% from last month.
Third-quarter new commercial building permits are also encouraging. They were up 13.3% in the Tri-Cities while neighboring metro areas saw declines. Chattanooga took the biggest hit with a 53.5% decline, followed by Asheville, down 16.9%, then Knoxville, down 8.5%. November’s Tri-Cities new permits had a value of $159.1 million.