Area Overview
Knoxville is home to the flagship campus of the University of Tennessee and the dominant market in East Tennessee. Knoxville’s economy is well diversified with a population in the MSA of 840,000. The city was host of the 1982 World’s Fair, with a theme of Energy. That theme carries through today as the area is home to the U.S.’s largest Department of Energy research lab (Oak Ridge National Laboratory), Tennessee Valley Authority and the National Transportation Research Center. Knoxville’s economy is well diversified and very stable. The unemployment rate runs consistently below the state and national averages, and continued growth, particularly in automotive manufacturing and media production, support vigorous job expansion. The city’s low cost of living, low unemployment rate and high livability rankings make Knoxville a top contender on various “Best of” lists, including America’s 2nd Most Affordable City according to Forbe’s and one of the 10 Fastest Growing Cities as ranked by CNN Money. Among the companies headquartered in the area are Scripps Networks interactive, Regal Cinema, Pilot/ Flying J and Sea Ray Boats.
Markets
Office
Knoxville’s office market is comprised of 10 submarkets and roughly 16 million square feet of space. It has proven to be a strong office market compared to markets of similar sizes due its high concentration of national headquarters in the area. Corporate expansion and relocations due to Knoxville’s business-friendly environment and ample technological and human capital within the region continue to make Knoxville a desirable business location and has led to an office revival with new construction in various submarkets.
Retail
There is over 52 million square feet of inventory in Knoxville’s retail market spread across 13 submarkets. The retail sector of Knoxville has experienced continuous growth the last five years, with many existing retailers expanding and many more new retailers entering the market for the first time. The area’s high employment rate and varied demographics make Knoxville a great location for a variety of retail ventures. Though a majority of new retail developments have been focused in west Knoxville, future plans to develop Knoxville’s south riverfront will help spur new retail development in the downtown and south submarkets. Recent additions to the market include; Trader Joe’s, Publix, Whole Foods, Anthropologie and Cheese Cake Factory.
Industrial
The Knoxville Industrial market has roughly 70 million square feet between warehouse/distribution and flex inventory. Knoxville is located within a day’s drive of almost 70% of the US population at the intersection of three interstate highways – I-40, I-75 and I-81. It is also served by two rail lines, and its location on the Tennessee River affords it direct barge access to both the Great Lakes and the Gulf of Mexico. This location serves a diverse group of companies in such industries as automotive manufacturing, food products, watercraft, medical devices and manufactured housing. Companies such as Denso continue to expand in the area because of the highly productive and loyal work force and access to world class research at the Oak ridge National Lab.
Investments
Investors, both institutional and private, are increasing their exposure to the Knoxville market, seeking yield. As home to a major research university and the nation’s largest government research laboratory, as well as TVA and four major hospitals, stability and resiliency are the hallmarks of the local economy. Listed by CNN Money as one of the 10 fastest growing U.S. cities, it also boasts the best employment outlook in the country according to ManpowerGroup and has been listed as the 2nd most affordable city by Forbes. Multi-family and industrial have been the most active properties.