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Q3 2026

Q3 2026

Q3 2026 Chattanooga Commercial Real Estate Market Report

Focus: Q3 2026 Market Trends

Executive Summary

Chattanooga's South Broad District is moving from plan to construction, anchored by the $115 million Erlanger Park stadium that opened in April and the 500,000 SF Station 33 mixed-use project that broke ground in August. Metro job growth of 0.8% outpaced the national rate, led by professional services and healthcare. On TenantBase, every Q3 Chattanooga tenant search was for office space, up from 24.3% in Q2, with most tenants planning 3 years or longer.

Sector Snapshot

Office: Demand rising. Metro office vacancy was 9.38% in 2025, with asking rents of $24.33/SF.
Industrial: Repositioning. Volkswagen shifted its Chattanooga plant from the ID.4 to the gas-powered Atlas in April 2026.
Retail and mixed-use: South Broad growth. Phase 1 of the South Broad District brings more than $300 million in private investment.
Multifamily: Absorbing supply. Occupancy was 90.5%, with 1,835 units under construction.

Chattanooga Tenant Demand Index

The TenantBase Tenant Demand Index tracks what businesses across the Chattanooga region are actively searching for on the TenantBase platform each quarter. Because it measures tenant intent before leases are signed, it shows where demand is heading ahead of traditional vacancy and absorption data.

Q3 2026 Search Share by Space Type (July 1 to September 30, 2026)

Office: 100.0%
Retail/Storefront: 0.0%
Warehouse/Industrial: 0.0%

Three-Quarter Trend

Office: 28.0% in Q1, 24.3% in Q2, 100.0% in Q3
Retail/Storefront: 42.0% in Q1, 70.3% in Q2, 0.0% in Q3
Warehouse/Industrial: 30.0% in Q1, 8.1% in Q2, 0.0% in Q3

Key Takeaways

Office was the only space type searched on TenantBase in Chattanooga in Q3.
Office tenants are committing longer. 3 to 5 year terms were the most requested, and two-thirds of Q3 office searches sought terms of 3 years or longer.
Requirements are small to mid-size. 3 to 5 year searches averaged 1,000 to 2,500 SF, and 5+ year searches 1,750 to 3,750 SF.

Office Market

Key Metrics (2025)

Vacancy: 9.38%, flat year over year (CommercialCafe, Yardi Research)
Average asking rent: $24.33/SF (CommercialCafe, Yardi Research)
Submarkets: East at 5.71% and $24.50/SF, South at 21.43% and $26.69/SF, and Downtown at 24.03% and $22.26/SF (CommercialCafe, Yardi Research)
New supply: an 80,000 SF office building is planned next to Erlanger Park in the South Broad District (Local 3 News)

TenantBase Office Activity

Demand share: 100.0% of Chattanooga tenant searches, up from 24.3% in Q2 and 28.0% in Q1.

Lease terms: 3 to 5 year terms were the most requested, followed by terms under one year and 5+ years.

Space requirements by term:

3 to 5 years: 1,000 to 2,500 SF
5+ years: 1,750 to 3,750 SF

TenantBase data vs. the market: Chattanooga office tenants on TenantBase are planning multi-year commitments for small to mid-size space. Downtown, at 24.03% vacancy, offers the most options and the lowest rents, while the East submarket is the tightest at 5.71%.

Development & Economic Drivers

Erlanger Park: the $115 million, 8,032-seat stadium opened April 14, 2026, on the former U.S. Pipe/Foundry site (Wikipedia)
South Broad District: a 140-acre redevelopment with more than $300 million in phase 1 private investment, including 300+ apartments and an 80,000 SF office building (Local 3 News)
Station 33: a five-building, 500,000 SF mixed-use project at 3210 Broad St with a 120-room hotel broke ground August 20, 2026 (NewsChannel 9)
Jobs: metro employment reached 294,700, up 0.8% year over year, with professional and business services up 2.7% (Chattanooga Chamber)

Multifamily Market

Chattanooga conventional apartment occupancy was 90.5% in Q2 2026, with average effective rent of $1,390, according to ALN Apartment Data for the Chattanooga Apartment Association. About 1,835 units were under construction, including projects in Hixson, East Brainerd, and Ooltewah.

Q4 2026 Outlook

Office: Expect steady demand for small and mid-size space, with Downtown offering tenant leverage.
Mixed-use: Expect South Broad District momentum to continue as Station 33 begins vertical construction.
Multifamily: Expect concessions to persist as new supply leases up.

Frequently Asked Questions

What type of commercial space are Chattanooga tenants searching for in 2026?

In Q3 2026, all Chattanooga tenant searches on TenantBase were for office space, up from 24.3% in Q2.

What is the office vacancy rate in Chattanooga?

Chattanooga office vacancy was 9.38% in 2025, with Downtown at 24.03%, according to CommercialCafe (Yardi Research).

What is the South Broad District?

The South Broad District is a 140-acre redevelopment around Erlanger Park, with more than $300 million in phase 1 private investment planned.

How can I find commercial space in Chattanooga at no cost?

TenantBase matches business tenants with vetted independent tenant rep brokers across the Chattanooga region at no cost to the tenant. Brokers are compensated by the landlord. Get started with TenantBase.

Sources

Disclaimer

Information in this report is aggregated from third-party sources and TenantBase proprietary platform data, and was synthesized with the assistance of AI. Market metrics reflect the most recent published data available at the time of writing. TenantBase search data reflects tenant activity on the TenantBase platform and is not a measure of total market leasing. All figures should be independently verified before making real estate decisions.

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