Diversifying to Meet Growing Needs
From 2010 to 2016, 16,558 jobs were added in the Chattanooga metro area. In 2016 alone, $121 million in new business investments, creating more than 1,149 new jobs, was announced in Hamilton County. And just during the first quarter of 2017, Hamilton County led the state in growth with 787 new businesses created, 32% more than the first quarter of 2016. These economic trends have led to an increased demand for commercial real estate, including industrial space, downtown apartments and mixed-use property, hotels, restaurants, retailers, and expanded health care facilities.
Enterprise South Industrial Park is nearly full with Volkswagen’s North American plant, auto suppliers like Gestamp and Tag Manufacturing, and Amazon’s 1 million-square-foot fulfillment center. The park’s only remaining space, a 250-acre plot, is being cleaned up by developers to be sold to interested auto suppliers.
FedEx recently opened their $30 million, 235,000-square-foot ground distribution center near Hamilton Place. Near downtown, Technique Surfaces USA is leasing 35,000 square feet of the former Alstom facility on Riverfront Parkway.
Population growth, while steadily growing, has been concentrated in downtown neighborhoods, East Brainerd, and Ooltewah. The increase in mixed-use development downtown reflects this concentrated population growth. In 2016, $1 billion in private investment was poured into downtown developments; the majority was invested in housing, as new apartments, condos, and townhomes are being built to satisfy baby boomers and young professionals’ desire to live, work, and play in the same place.
In East Brainerd and Ooltewah, where population is also increasing, development is visible in mixed-use space, seemingly on every corner. These spaces contain retail shops, offices, or restaurants on the ground floor and living space on the top floors.
With a thriving tourism industry, bringing in 3.5 million annual visitors spending over $1 billion, hotel development and management companies are continuing to expand across Hamilton County. Among these new hotels is the Westin, which opened in 2017. Tru by Hilton and the Edwin Hotel, both operated by Vision Hospitality, and Moxy Hotel, by 3H Group Hotels, are opening in 2018. The historic Read House is currently under restoration by Avocet Hospitality Group, to be completed by fall 2018. The vacant, historic St. George Hotel on Market Street is set to undergo a $20 million renovation. The Scenic Land Company announced development plans for the Lookout Mountain Resort on the eastern brow of Lookout Mountain, Georgia. An extended stay hotel, Home2 Suites, is being constructed by Vision Hospitality near Hamilton Place, and Vision is also building an 88-room Hampton Inn in East Ridge.
Retailers and grocery stores are expanding and moving to the Chattanooga area to satisfy demand. Walmart plans to build a supercenter on Highway 58 in Harrison, Tennessee. Outdoor retailer REI and grocer Publix plan to place stores in the Waterside development near Shallowford and Gunbarrel Road, while Hamilton Place Mall is adding H&M, the world’s second-largest fashion retailer, and a Rodizio Grill restaurant. Small retailers and restaurants are taking advantage of new mixed-use design and moving into the ground floor of new developments both in downtown neighborhoods and Cambridge Place, a shopping center in Ooltewah.
Several of the largest hospitals are continuing to expand their facilities. CHI Memorial announced plans to take over management of Cornerstone Medical Center, formerly Hutcheson Medical Center, in Fort Oglethorpe. Erlanger Health System is currently constructing Erlanger Behavioral Health Hospital and their new Children’s Hospital at Erlanger Outpatient Center. Parkridge Medical Center is in the middle of a $28 million phase one capital expansion, part of their $62 million investment in the downtown facility.
With continued economic progress and current population trends, sustained growth is expected for commercial real estate throughout the Chattanooga area.