There are several ways to look at the Tri-Cities retail real estate landscape. And they are as much about the evolution of retail as they are about the brick and mortar inventory.
1 – The Tri-Cities – like the rest of the nation – is over-retailed. The U.S. has a higher per capita percentage of commercial real estate devoted to retail when compared to other developed nations. The retail apocalypse is disrupting that.
2 – There’s a glut of vacant retail space. It’s requiring Realtors and landlords to press their repurposing ideas to fill some of the slack. At the same time, there’s some new retail construction.
3 – While some retailers maneuver for location, the new reality is the customer is now the point of sale. They no longer need a store to learn about or buy products. Retailers who create relevancy to today’s customers are doing OK. Those who are still trying to sell products via yesteryear’s model are struggling.
4 – While many retailers are consolidating stores or relocating in a quest for cheaper rent and a market sweet spot, retail sales and sales tax collections are up. A comparison of the Nov. 2009 to Nov. 2019 retail sales tax collections shows a 38.8% increase in the three-county Johnson City Metropolitan Statistical Area (MSA) Collections in the four-county Kingsport-Bristol MSA are up 36.1%.
Commenting on the local retail inventory situation, one commercial practitioner lamented it’s the worst he’s ever seen. While that’s not a universal observation, others say the market is not what they expected considering the state of the local economy and consumer confidence.
Last year there were 37 local retail-commercial sales and a combined 65 retail-commercial and shopping center lease transactions, according to the Northeast Tennessee Association of Realtors (NETAR) Commercial Multiple Listing Service (CMLS).
During January, retail sales and lease transactions were half of what they were during January last year. Total commercial sales equaled last year’s sales while lease transactions were down 62%. Of course, those are only for CMLS listings. Commercial real estate has several national venues.
At the end of January, there were 93 retail-commercial and shopping center listings for the Johnson City MSA. The total in Kingsport-Bristol was 85 listings.
The property class with the most transactions was vacant land sales. It also dominated local listing – 137 in the Johnson City metro area and 59 in Kingsport-Bristol.
NETAR’s CMLS page features transactions and listings as well as the full listings inventory by Johnson City, Jonesborough, Kingsport, Kingsport, and Bristol https://www.netarcmls.us/
Categories: REAL ESTATE