Knoxville Market Highlights Business Growth throughout the Region in 2021
At DPM Care, we’re proud of our Knoxville roots, and we’ve enjoyed watching the city grow over the past 24 years.
And though COVID-19 brought many challenges, we’re excited to see that Knoxville’s development continued through the pandemic, as the city ranked third in the nation for job growth.
That trend has continued into 2021, and planned projects suggest that Knoxville will continue attracting more jobs, more people, and more businesses in the future. We may experience some growing pains in the process — as population growth outpaces available housing and the need for great local talent increases — but the city’s future looks bright.
Knoxville Commercial Real Estate Market Update for 2021
Keep reading to learn more about some of the biggest trends to watch out for in Knoxville’s commercial real estate market.
Job Creation Will Continue
With companies relocating to the area, local businesses expanding, and thousands of new businesses opening, we can expect to see continued growth in the number of jobs available to Knoxville residents.
Local real estate professionals partly attribute this to the growth of other areas in the Southeast; as cities like Nashville and Atlanta become increasingly popular and expensive, businesses are starting to look to smaller markets in the region.
Upcoming expansions include a new support center from global tech firm CGI — which will include around 300 new tech jobs — two new Amazon centers with 1,000 new jobs in Knoxville and Alcoa, and a Lending Solutions Inc. call center that will create 250 jobs.
At the same time, businesses already located in the region are also growing. In 2021, 20 Knoxville-area companies made the Inc. list of 5000 fastest growing companies.
And new businesses are also opening at a record pace. In the second quarter of 2021, there were 19,983 new business filings in Tennessee, and Knox County had the third highest number of new filings.
A Housing Shortage May Threaten Commercial Growth
With all of this growth, Knoxville’s unemployment rate fell to just 2.9% in September, the lowest it’s been since September 2019. In August, the Knoxville Area Chamber of Commerce reported that even if every unemployed person in the area was hired, they would only fill 58% of job openings.
This means the city will require an influx of new residents to fill future jobs.
Unfortunately, challenges in Knoxville’s residential real estate market could hurt the commercial market in the near future. Right now, there’s a limited supply of available homes.
Some experts predict the region will struggle to attract more companies to the area as a result, because employees won’t have anywhere to live, and new positions will be harder to fill.
Industrial Property is Increasingly Hard to Find
Between zoning laws and the shortage of available flat land in the Knoxville area, businesses may struggle to find space suitable for industrial projects.
In fact, industrial property has only 2% vacancy in the region.
This problem will likely continue for some time, especially considering the space required for Amazon’s planned distribution facility projects in Alcoa and Knoxville, this problem will likely continue.
Tennessee’s Population Growth Will Benefit Knoxville
Even before the pandemic gave many Americans a new opportunity to move out of major cities and work remotely, Tennessee’s population was growing rapidly.
From 2010 to 2020, the state grew by 8.9%, compared to a national rate of 7.4%. Though this growth most heavily impacts Nashville and the surrounding Middle Tennessee area, Knox County also grew by 10.8%, exceeding both the state and national averages.
This shift in Tennessee’s population will likely play a continued role in the state’s economic growth. With a growing pool of talent and lower costs of doing business, the state is an attractive option for businesses looking to relocate.
DPM Care Takes Pride in Knoxville
Though growth always comes with challenges, we also look forward to the opportunities that lie ahead for the Knoxville area.
At DPM Care, we’re proud to partner with our clients and deliver the highest quality of care and cleaning so they can focus on growing their businesses and transforming the city in the process.