Chattanooga TN, August 14, 2025
News Summary
Chattanooga’s downtown area has achieved impressive occupancy rates, with office spaces at 93.6% and retail spaces at 97.3%. The River City Company’s market conditions report highlights significant investments and growth with 23 new businesses opening. Currently, 19 construction projects are underway, totaling $636 million, indicating a flourishing economy. Despite these positive trends, there remain vacant office and retail spaces, emphasizing the need for ongoing economic development as Chattanooga attracts nearly 10.7 million visitors annually.
Chattanooga Sees High Office and Retail Occupancy Rates
Chattanooga’s downtown area has reported an office space occupancy rate of 93.6% as of July 2025, significantly higher than the national average of 79.6% for office spaces. This positive trend in occupancy rates is complemented by a robust retail sector, where retail space in downtown Chattanooga stands at 97.3% occupied, surpassing the national average of 95.9%.
Market Condition Report by River City Company
The data was released in the inaugural market conditions report by the River City Company, a nonprofit established in 1986 aimed at revitalizing downtown Chattanooga. This report, intended to be published biannually, provides essential insights into the downtown real estate market, showcasing the area’s economic vitality.
Business Growth in Downtown
Since July 2024, downtown Chattanooga has welcomed 23 new businesses, exceeding the number of closures or relocations. Notable newcomers include Dallos Vinyl Love, a record store; Hungry Mother, a bagel shop; Keystone, a grab-and-go restaurant; and Monkee’s, a high-end women’s boutique. This influx of new establishments indicates a strengthening economy and growing interest in the downtown area.
Construction and Economic Investment
Currently, there are 19 construction projects underway in downtown Chattanooga, representing a substantial investment of $636 million. These projects encompass the addition of over 650 hotel rooms, renovations and new developments covering 1.2 million square feet of commercial space, and approximately 1,800 residential units.
Despite the robust growth, about 545,000 square feet of office space remains available across 24 properties downtown. Additionally, there are 17 available retail spaces, with an asking rent of $21.64 per square foot. Recent closures, such as Taco Mac and Sticky Fingers due to court-ordered bankruptcy, highlight the challenges that some businesses face amid the overall economic growth.
Visitor Statistics and Hospitality Development
Chattanooga attracts nearly 10.7 million visitors annually. The average daily hotel room rate in the downtown area is $159, with an overall hotel occupancy rate of 65.1% across 28 hotels and approximately 3,300 rooms. Future hotel developments include the Embassy Suites with 185 rooms, set to open in September 2025, and several other hotels expected to launch in 2025, including The Waymark by Hilton, Caption by Hyatt, and Drury Plaza Hotel.
Conclusion
The impressive occupancy rates in Chattanooga’s downtown area, combined with new business openings and significant investments in construction, reflect a thriving local economy. Continued monitoring of these trends will offer deeper insights into the future of Chattanooga’s downtown landscape.
FAQ
- What is the current office space occupancy rate in downtown Chattanooga?
- The office space occupancy rate is 93.6%, which is much higher than the national average of 79.6%.
- How does downtown Chattanooga’s retail space occupancy compare nationally?
- Retail space in downtown Chattanooga is at 97.3% occupancy, slightly above the national average of 95.9%.
- What new businesses have recently opened in downtown Chattanooga?
- Notable new businesses include Dallos Vinyl Love, Hungry Mother, Keystone, and Monkee’s.
- How much is currently being invested in construction projects downtown?
- There are 19 construction projects with an investment totaling $636 million.
- What are the average hotel occupancy rates and room rates in downtown Chattanooga?
- The average hotel room rate is $159, with an overall occupancy rate of 65.1% across 28 hotels.
Key Features of Chattanooga’s Economic Growth
| Category | Chattanooga | National Average |
|---|---|---|
| Office Space Occupancy Rate | 93.6% | 79.6% |
| Retail Space Occupancy Rate | 97.3% | 95.9% |
| New Businesses Opened | 23 | N/A |
| Investment in Construction Projects | $636 million | N/A |
| Available Office Space | 545,000 sq ft | N/A |
| Average Hotel Room Rate | $159 | N/A |
| Average Hotel Occupancy Rate | 65.1% | N/A |
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Additional Resources
- Times Free Press: Downtown Chattanooga Businesses Hurt by Parking
- Wikipedia: Chattanooga
- Chattanoogan: New Report Shows Downtown Chattanooga
- Google Search: Chattanooga economic growth
- Local 3 News: Downtown Closings Spark Concern
- Encyclopedia Britannica: Economic Growth
- Times Free Press: Report Downtown Chattanooga Beats National
- Google News: Chattanooga businesses
Author: STAFF HERE CHATTANOOGA WRITER
The CHATTANOOGA STAFF WRITER represents the experienced team at HEREChattanooga.com, your go-to source for actionable local news and information in Chattanooga, Hamilton County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Riverbend Festival, Chattanooga Oktoberfest, and Moon River Festival. Our coverage extends to key organizations like the Chattanooga Area Chamber of Commerce and United Way of Greater Chattanooga, plus leading businesses in manufacturing, insurance, and utilities that power the local economy such as Volkswagen Chattanooga, BlueCross BlueShield of Tennessee, and EPB. As part of the broader HERE network, including HEREBristol.com, HEREKnoxville.com, HEREMemphis.com, and HERENashville.com, we provide comprehensive, credible insights into Tennessee's dynamic landscape.
