GRAY, Tenn. – Commercial estate transactions for the first 11 months of this year have slowed in the face of rising inflation, household income squeezes, and geopolitical events. It was the second month that transactions declined from last year’s total. But transactions alone are not a total market indicator. Investors – both local and those from outside the region – inquiries and activity have not declined.  

November’s transactions were down 55% from last year. The three-month trend is down 32% 

During the first 11 months of this year, there have been 486 local transactions. Last year there were 512. 

Office and Multi-family transactions are dominating the local market. The local multi-family sector is also active, although the occupancy situation is seeing more competition. It hasn’t dampened demand or investors’ plans to expand the market. So far this year, there have been 16 multi-family deals. That doesn’t include the sale of larger apartment communities that are typically listed on national commercial services.  

Some of the competition comes from new townhome build-to-rent communities on the market. The one on West Stone Dr. in Kingsport is now leasing, and construction will reportedly begin in Gray on a new development soon. 

Demand for retail space peaked in August and September, and there were only four more transactions in November than last year. 

Vacant land sales are flat for the first 11 months of this year. Transactions tracked by the Northeast Tennessee Association of Realtors (NETAR) Commercial Multiple Listing Service (CMLS) increased to 39 from 38 last year. Vacant land deals tracked by the Flex commercial database are down 11% from this time last year.  

 Active inventory and new listings are also running behind last year’s pace. 

Some of the slack in the November market can be attributed to seasonality.