It wasn’t the best year. But it wasn’t the worst. When you look at the data, 2019 was an OK year for Tri-Cities Commercial Real Estate (CRE). Sales, leases, and new building permits were up. But volumes were down. Several commercial practitioners described it as one of those years when you worked harder but made less.
At the same time, there was and continues to be pent up optimism focused on the fate of a casino in Bristol, Va., and a pending major development in Boone’s Creek. Those are just two examples and they’re hand-in-hand with the unknowns of this year’s presidential election and effects of the coronavirus on the economy.
Some economists are saying the economy may already be in a recession – or very close to it. Others are more reserved. What’s for sure is it won’t be business as usual for a while. The economy was pretty good before the coronavirus, but…..
Goldman Sach’s forecast is for “GDP growth slowing to 0.7% in the current quarter and grinding to a halt in the second quarter. The third quarter likely will see 1% growth, and the fourth quarter is expected to post a 2.3% expansion.”
There were more local CRE sales than there were in 2018 – or since 2016. But volumes were down 10.9% from 2018 and 9.1% from 2017, according to the Appalachian Highlands Dashboard for Real Estate Analytics. There were 639 sales compared to 478 in 2018. The 2019 sales volume was $361.6 million compared to $405.8 million in 2018.
Combined lease transactions from the Northeast Tennessee Association of Realtors (NETAR) Commercial Multiple Listing Service (CMLS) were up by 10 from 2018 while there were five fewer sales. When combined, there were 230 transactions, up five from 2018.
There were 519 new commercial building permits last year – a 6.7% increase over 2018. The total permit value was $225.2 million, down 9% from 2018, according to The Market Edge’s year-end Commercial Building Permit Trends Report.
Here’s how new permits and value looked across the rest of the region:
Chattanooga. New permit down 25%. $445.6 million value down 27%.
Knoxville – New permits up 12%. $1 billion value up 14%.
Asheville – New permits down 23.8%. $348.4 million value down 31%.
DRILL DOWN 2019 v. 2018
- sales, up 7
- Sales volume $133.7 million, down $53.2 million
- 175 new permits, down 29
- $87.9 million permit value, up 33%
- 175 sales, up 115
- Sales volume $69.9 million, down $49.1 million
- 164 new permits, down 4
- $90.4 million permit value, down 10%
- 64 sales, up 4
- Sales volume $38.6 million, up $13.4 million
- 72 new permits, down 12
- $16.7 million permit value, down 17%
- 56 sales, up 2
- Sales volume $32.3 million, up $1.5 million
- 22 new permits, down 12
- $2 million permit value, down 82%
- 40 sales, up 10
- Sales volume $25.7 million, up $16.6 million
- 65 new permits, up 5
- $23.9 million permit value, down 49%
- 35 sales, down 4
- Sales volume $10.7 million, down $7.7 million
- 14 new permits, up 8
- $12.4 million permit value, up 187%
- 31 sales, up 8
- Sales volume $40.6 million, up $31 million
- 24 sales, up 11
- Sales volume $5.2 million, up $492,694
- 20 sales, up 8
- Sales volume $361.5 million, down $44.3 million
Bristol VA, Johnson Co., and Unicoi Co. are not included in The Market Edge’s report.
The Appalachian Highlands Dashboard for Real Estate Analytics is a new venture by Don Fenley, supported by TechPoint’s Austin Ramsey and TCI Group’s Nina Heffner, and underwritten by Jerry Petzoldt’s TCI Group. CRE sales are recorded by deed transfers.
Categories: REAL ESTATE