Did You Know?
The Read House Hotel originally opened in 1872, rebuilt in 1926, and has hosted Winston Churchill, Gary Cooper, Oprah Winfrey, and Al Capone.
Powered by growth in manufacturing and logistics, an expanding tourism industry, a thriving entrepreneurial culture, and a surge in baby boomers choosing Chattanooga, the scenic city’s local economy is expanding, increasing the demand for commercial property. Since 2014, more than 14,000 jobs have been added in the metro area. In advanced industries alone, another 10,000 jobs are expected in the next few years. Population growth is steady, with the highest growth rate in aging baby boomers who are choosing the Chattanooga area for their retirement. These economic expansion and population trends have led to an increased demand for commercial real estate, including land for industry, downtown apartments and mixed-use space, hotels, restaurants, and expanded healthcare facilities.
With Volkswagen ramping up production on their new midsize SUV and their recent hiring spree of more than 1,000 employees, auto suppliers and other businesses have gobbled up available commercial space in Enterprise South Industrial Park. The only remaining space is a 250-acre plot that is being developed for new suppliers and industries. Among the newest additions near the Volkswagen plant is FedEx’s new $30 million distribution center, slated to open in August 2017.
With a projected 25% population growth in baby boomers by 2020, nearly $1 billion in new leisure, retail, office, and residential space is under development or pre-development downtown, according to the River City Company. Much of the development is for mixed-use facilities, containing retail shops, offices, or restaurants on the ground floor and apartments on the top floors. The increasing desire to live, work, and play in the same space has led to the boom in mixed-use design. Baby boomers, choosing their city for retirement, and young professionals, wanting to live close to their jobs, are leading the demand for living spaces downtown, and the number of people living downtown is projected to double in the next couple years. In response, developers are renovating nearly century-old buildings and building new developments in City Center, the Southside, MLK, South Broad, and North Shore. Mixed-use development is also increasing in Hixson, Ooltewah, and East Brainerd, as companies are constructing new developments with apartments above retail and office space.
With 3.5 million annual visitors spending over $1 billion dollars, hotel development and management companies are continuing to expand. The historic Read House hotel was bought by Avocet Hospitality Group and is being renovated and restored to its 1920s grandeur. The long-vacant, historic St. George Hotel on Market Street is set to undergo a $20 million renovation and floor addition. Several upscale and boutique hotels have just opened or are slated for opening this year, including the Dwell Hotel, Westin Hotel, the Edwin Hotel, operated by Vision Hospitality Group, Moxy Hotel by 3H Group Hotels, and Aloft, managed by Starwood Hotel & Resorts Worldwide. Vision is also constructing an 88-room Hampton Inn in East Ridge, near Camp Jordan, and a Home2 Suites near Hamilton Place.
Retailers and grocery stores are expanding and moving in to the Chattanooga area. Big box retailers, such as Gander Mountain in Hixson, Cabela’s in Ringgold, and Bass Pro Shops in East Ridge, have recently opened. Retailers, including Vans, Oakley, and Dos Bros, are joining Hamilton Place. New grocery stores, including Earth Fare and Walmart Supercenter, are expanding in the area. New restaurants, from casual eateries to fine dining, have opened throughout
the area as well.
Several of the largest hospitals, including Erlanger Health System and Parkridge Health System, are continuing to expand their facilities. Erlanger Health System is finishing its expansion of Erlanger East on Gunbarrel Road, and they recently announced plans for a $25 million mental health hospital. Parkridge Medical Center is currently undergoing its largest renovation project in the last 20 years, a $62 million investment in the downtown facility. HealthSouth Chattanooga Rehabilitation Hospital just completed a 27,100-square foot expansion.
As Chattanooga’s economy continues to expand and population trends stay the same, demand for commercial properties will continue to grow.