While 2024 was a so-so year for residential real estate the world of commercial real estate performance was the opposite. It’s a welcome respite from 2023. 

At the year’s end, commercial transactions were up 33.7%, new listings were up 27% and the three-month transactions trend was up 108%. And if the rest of 2025 is anything like January, it’s going to be a banner year. Commercial practitioners report investors have their check books out and enthusiasm is high. 

Here’s a 30,000-foot view of the region’s commercial real estate marketplace and last year’s performance.   

The strongest transactions performance last was in the multi-family, office and retail sectors. Although the multi-family sector had fewer transactions than it did in 2023 it was still major factor in the 2024 big picture. 

 It was rare to read anything in the media but doom and gloom about the office sector last year. But conditions in the local marketplace were the opposite. Demand for office space was stronger than it was nationwide. As a result, rent prices rose faster than they did nationwide, and the vacancy rate was lower. There were 54 local office transactions last year, an increase of 13 from the previous year. 

Demand in the multi-family sector split the region’s outlook last year. It was weaker than the national average in the four-county Kingsport-Bristol metro area and stronger than the nationwide average in the three-county Johnson City metro area  

The market effect rental rate for the 6,041 Kingsport-Bristol rental units was $1,085. It was $1,088 for the 7,661 Johnson City metro area rental units. The vacancy rate in Kingsport-Bristol was 6.9%. It was 3.4% in the Johnson City metro area.  

 Several major apartment complexes were and still are under construction in both metro areas. But most of the local transactions were for the medium and smaller multi-family concerns. Last year’s transaction total was 68, down from 110 the previous year. Currently, some of the pressures of a rental shortage have eased, as have rent increases.  

Demand for commercial space in both metro areas was stronger than it was nationwide so rental prices rose faster than they did nationwide, and the vacancy rate was lower than the U.S. norm. 

There were 614 transactions in the commercial sector last year, up one from the previous year. 

The industrial sector demand was also divided across the region. It was weaker than national demand in the Kingsport-Bristol metro area and stronger in the Johnson City metro area.  Despite the demand differences, industrial rents rose faster than they did nationwide, and the region had a lower vacancy rate than the national average. 

There were 28 industrial transaction last year, up from 19 the previous year.  

Vacant land is another example of a sector that was down last year but was still a major factor in the growing commercial marketplace. There were 1,488 transactions, down from 1,693 the previous year.  

Another way to look at the health of the commercial real estate marketplace is noting the number of new businesses and the construction making room for more.  

Either way you look at it – the numbers or watching the new construction – the message is the same. That message is commercial real estate in the Tri-Cities is on the upswing.