Last week, River City Co. dropped a detailed, 69-page market analysis from RCLCO Real Estate Consultants on downtown Chattanooga’s real estate market.
Some background: RCLCO Real Estate Consultants also did a market analysis for Chattanooga back in 2013.
Why a new study? Chattanooga has changed quite a lot in the past 10 years, and this analysis specifically focuses on forward-looking market opportunities for multi-family rental, for-sale residential, student housing, office, retail, and hotel development downtown.
“The market is hungry for new downtown residential options, and there is a strong opportunity to bring residents to historically commercial parts of Downtown and create a truly mixed-use environment with places where visitors and residents can live, work, and play.” — Erin Talkington, managing director at RCLCO
Major findings:
- Rental housing (pg. 8) | Opportunity for new rental products (especially multi-family + affordable housing), opportunities for adaptive reuse
- For-sale housing (pg. 9) | Opportunity for new supply (particularly condominium conversion or adaptive reuse)
- Office (pg. 10) | Older buildings at risk of under-utilization or vacancy, new products necessary for retention + growth. Planned new office space will likely threaten older office buildings (but, there’s an opportunity to convert these buildings to creative offices with smaller floor plans or residential units)
- Hotel (pg. 11) | On track with the current pipeline — weekend occupancy has fully recovered, weekday travel hasn’t rebounded to pre-pandemic levels (but, average daily rates have risen to fill that gap)
- Retail (pg. 12) | Broadly balanced, but a lack of “daily needs” retail (e.g., residential focused and grocery options) is a major weakness
Critical success factors
- Market-driven adaptive reuse
- Retail-residential synergy
- Attracting business travel
- Efficient public transit
- Effective placemaking
“As Chattanooga continues to welcome new residents, property is redeveloped and new developments take place, it is essential that we find the right mix of housing, retail, hospitality, and office space in this post-pandemic environment.” — Emily Mack, president + CEO of River City Co.
