Cookeville Commercial Real Estate Market Seeing Imbalance Currently

Building costs have jumped but lease rates have remained consistent, leaving Cookeville’s commercial real estate imbalanced.

That according to local real estate expert Craig Hughes. Hughes said that as the cost to build has nearly doubled since 2021, lease rates have not been able to keep up. Hughes said this leads to a lack of incentive for investors to build.

“I kind of joke that we build apartment complexes and home developments and retail centers, but we don’t necessarily build places to go to work,” Hughes said. “Although that has been true, it has also pushed up prices of available spaces on commercial buildings.”

Cookeville has extensive land available for retail projects, but many of the city’s retail centers are now full. The final spot in the Shoppes At Eagle Pointe recently leased. With the availability of commercial space in Cookeville limited, Hughes said neighboring counties may see an increase in commercial development.

“You start seeing a little bit more outward pressure to where folks maybe had not considered a Sparta, a Livingston, a Baxter in the past, but they will because that’s where the availability is of a space,” Hughes said.

Hughes said that on a national scale, banks are not lending much money right now which makes it difficult to build without cash or a large down payment.

Hughes said that eventually, we’ll see lease rates reset to current market conditions when leases run out. Hughes said this would lead to local businesses that were tenants in buildings go out and build their own buildings, creating more balance.