Real estate is so much more than single-family homes. From multifamily, mixed use, and hospitality to office, industrial, and retail, commercial real estate touches all aspects of a community. And while it might seem like a foreign idea now, commercial real estate really took a hit during 2020 and only started recovering in 2021. Let’s take a look at where this sector was and the hopeful signs of where it’s going.
The National Association of Realtors’ Commercial Real Estate Metro Market Report for Q1 2022 shows that the greater Chattanooga’s market is stronger compared to the overall U.S. market.
NAR’s research identified the following 16 markets as the hottest in commercial real estate in the first quarter. While Chattanooga wasn’t in the top 16, our neighbors in Nashville and Atlanta were, and being located between the two means our commercial market is recovering and thriving as well.
NAR’s research included 25 variables that reflect a metro area’s economic conditions, demographics, and employment. Considerations included job growth, wage increases, and population growth, as well as market conditions on vacancy rates, absorption, rent growth, cap rates, and more. An index above 50 means market conditions are stronger than nationally, and an index below 50 means local market conditions are weaker than nationally. Greater Chattanooga scored a 56 on this index.
There are hopeful signs for commercial real estate throughout the country. Brandon Hardin, an NAR research economist, reported that retail is showing excellent signs of growth, with Q1 posting sizable gains in employment and wages and actually exceeding 2019 levels. Increased income opens the potential for more consumer spending, Hardin noted, adding that data early in the year is already demonstrating this growth.
Retail sales showed a sharp year-over-year increase in February, led by gas stations at 37 percent, food and beverage at 33 percent, and clothing stores at 30 percent. “Consumers are feeling better about returning to pre-pandemic activities,” Hardin said. “People are going out to dinner, going out to watch sports.”
Whether you’re looking for commercial space for a business, or a home for your family, utilizing the services of a realtor remains the best way to ensure that you have the expert advice needed to make an informed purchase. Realtors work for our clients and community every day. That’s Who We R.