NETAR: Local Commercial Real Estate Sales, Leases at New High | Local business news
Local commercial real estate transactions ended 2021 at a ten-year high and are expected to perform well despite the outlook for higher interest rates, according to the 2021 Commercial Real Estate Report recently released by the Northeast Tennessee Association of Realtors.
Transactions from listings on the two local business databases saw a 54.7% improvement over 2020, according to a NETAR press release on the report. Commercial leases and sales totaled 571 on the region’s two local databases for commercial listings, where the 2020 total was 369.
“While office transactions recorded the highest number of transactions for the second year in a row, the retail and commercial sector recorded the highest annual growth rate,” said Cassie Petzoldt, president of the Trade Committee of the Northeast Tennessee Association of Realtors (NETAR). “Deals at all levels were consistently strong in the third and fourth quarters. Out-of-state investors have and continue to seek opportunities as they focus on secondary metro areas like Knoxville and Chattanooga to areas tertiary rural metropolitan areas such as the Tri-Cities.
There were 99 leases and sales in the office sector on NETAR’s Commercial Marketplace Listing Service (CMLS), according to the release. The total for 2020 was 73. 2021 started with 119 office listings and ended with 69, according to the statement. The Johnson City metropolitan area had slightly more inventory absorption than Kingsport-Bristol.
The retail and trade sector registered 87 leases and sales, marking an increase of 81.3 percent over the previous year, according to the release. The absorption was evenly distributed between the two metropolitan areas of the region.
Transactions in the shopping center sector increased by 32.2% in 2021 to 41, according to the statement.
The Johnson City metro area led absorption in the mall sector, but the sector continues to have abundant inventory, according to the release.
Industrial transactions are up 50%, and commercial real estate agents say there would have been more activity if the area had more inventory – especially inventory suited to increased last-mile functions.
Vacant lots are the only area segmented by the two local databases. There were 2,065 transactions in 2021, a 41.3% year-over-year increase and about the same growth rate as in 2020, the statement said.