Imagine watching your favorite college team. If you’re like me, it certainly isn’t hard to imagine. As your favorite team snaps the ball, it’s clear that they’re running like a finely oiled machine. The offensive line makes the correct blocks, the running backs leave the other team staggering, and your quarterback is making plays that look like they’re out of a comic book. You think your favorite team has it all together, but then you see your team’s defense – sloppy tackles and undisciplined plays.
When watching your team, you didn’t have the complete picture of what was happening. The real estate market can be similar. Real estate isn’t just houses. A comprehensive view of the real estate market looks at the residential and commercial sectors.
Commercial real estate refers to properties specifically intended for business purposes. This category includes many property types, such as office buildings, retail spaces like malls and storefronts, industrial sites like warehouses and manufacturing facilities, hotels and motels, and multifamily complexes. While residential real estate is focused on where people live, commercial real estate is geared towards property that generates a profit, whether by rental income or business operations.
So, how does the commercial market look in our area? Thankfully, NAR Research frequently examines their Commercial Real Estate Metro Market Report, which provides insight into the nation’s largest metropolitan commercial real estate markets. Each report evaluates many factors affecting the market, including indicators on a metro area's economic and demographic conditions and commercial market indicators on net absorption, vacancy rates, rent, deliveries, inventory, total sales volume, and cap rates based on CoStar® market data.
The Commercial Real Estate Metro Market Report for Q2 of 2023 revealed some interesting data. For example, in Greater Chattanooga, wage growth was up 4.5% from June 2022 to June 2023. The national wage growth percentage was 3.7%, so our area is outperforming the national average. For retail space, demand for retail space is stronger than nationwide as this area has a faster absorption of retail space. As a result, rent prices rose faster here than nationally, and the vacancy rate is lower in this area.
As far as multifamily housing goes, demand for multifamily space is stronger than nationwide, as this area has a faster absorption of multifamily space. As a result, rent prices rose faster than nationwide in this area.
All this data shows that whether you’re looking to find a place for your business, or finding a place to call home, utilizing the expertise of a REALTOR® is the best place to start. REALTORS have the know-how to help guide you in your property purchasing or selling needs. That’s Who We R®.