A new report released by River City Company reveals that Chattanooga’s downtown is thriving, outpacing national averages in multiple areas.
The semi-annual report compiles information across office, hospitality, residential, retail, and commercial sectors within the River City Company footprint of downtown Chattanooga.
Downtown Chattanooga is experiencing an increase in retail and commercial usage. Within the last year, 23 new businesses opened from the Southside to the Northshore, which is more than closed or relocated. Downtown Chattanooga boasts a 2.7% vacancy rate of available retail properties versus the 4.1% rate nationally, as reported by commercial real estate firm JLL.
Downtown Chattanooga is also well ahead of the national average for occupied office space, with 93.6% of available space occupied, versus a national record low at only 79.6% occupied. Despite national trends by companies to recall their workers to the office during the work week, according to Moody’s, hybrid and remote work persists in many other cities while pre-pandemic and early pandemic leases continue to roll over.
Locally, downtown Chattanooga has seen a significant number of major employers, especially TVA and Unum, returning their employees to the office. This has significantly benefited retail and restaurants in downtown Chattanooga.
“Cities are the engines of economic growth and this report highlights how downtown Chattanooga is a catalyst,” said Mayor Tim Kelly. “I’m thrilled to see the new businesses opening their doors across our neighborhoods and the strategic growth in our hotel capacity so we can welcome people to our great city from all over the globe.”
“We have seen a wide array of businesses open over the past year, from retail establishments like Furnish and Monkee’s, to new upscale dining at places like 2nd American. Having a healthy and diverse retail corridor in our downtown provides opportunities for visitors and locals to explore our vibrant and ever-evolving community that is rich with arts, music, and culture,” said Emily Mack, President & CEO of River City Company.
Our hospitality sector also continues to grow annually with Average Daily Rate now at $159 and Revenue per Available Room at $103, both a healthy increase of over 2% year-over-year. Hotels under construction downtown will deliver over 650 new rooms within the next few years, allowing downtown to accommodate the growing number of large-scale events and support the convention center as it seeks to increase capacity for conferences.
Lastly, the report outlines both single-family and multi-family home data. Chattanooga remains under the national average rent at $1,599 compared to $1,850 nationally, as reported by Moody’s. Single-family homes’ median days on the market have risen, but they are still performing well with an average of only 44 days on the market.
“We see the economic conditions report as a valuable tool to those who are seeking to grow their business or invest in downtown. We will also be able to track how we measure compared to others in the region and to be able to focus on areas we would like to improve,” said Mack.
The full report can be found HERE.