Urban Story Ventures bought the parcel from Mahindra in 2020 when the Indian automobile manufacturer exited Chattanooga. The developer has been in discussions with three potential tenants for the site, White said. Urban Story Ventures didn’t build the industrial space with a specific end-user in mind, White said, and ideally, it would be leased to a single large occupant.
David DeVaney, president of the commercial real estate company NAI Charter, said the availability of industrial land in Chattanooga has fluctuated over the past 30 years, noting there’s a dearth of appropriately zoned property that also has infrastructure like gas, water and sewer.
It’s challenging to get those properties rezoned because of the negative connotations — right or wrong — that accompany industrial development, he said.
There’s a difference between mega sites, which can be 1,000 acres or more and go after large users like Volkswagen, and big box industrial spaces that can range from 200,000 to 500,000 square feet. Filling those big box industrial sites has been for the most part successful in Chattanooga, DeVaney said, although they’re often segmented across multiple users.
The vacancy rate for industrial property in Chattanooga generally hovers around 1-4%, White said, and Urban Story Ventures started buying industrial properties in 2014 when it wasn’t popular to do so. About two years ago, White said, costs spiked to upwards of $12 per square foot.
“A lot of these tenants we’re seeing coming to the market need space now,” White said. “It’s not like, ‘Hey, we can wait 18 months or 24 months.'”
They’re looking at Greenville, South Carolina; Birmingham or other surrounding cities, White said.
“In most cases, if there’s not a building here, they’ll go to the next market,” he said.
Another parcel in the Riverport changed hands recently, although it isn’t yet clear who purchased the land. The industrial facility, situated at 2800 Riverport Road, was the former home of a Japanese specialty chemical maker called Sofix, and it sold for about $6.8 million earlier this year.
White said a number of industries that settled in the Chattanooga area several years ago are choosing to expand their operations, and more out-of-state companies are eyeing the region with interest.
“We’re seeing a lot of industrial users coming here — small, medium and large,” White said. “They’re swarming around the market right now. It is tight. We’ve got folks vying for multiple buildings.”
