Asheville Commercial Real Estate Guide

Introduction

Asheville, North Carolina, has established itself as a dynamic hub for business growth, driven by a robust tourism sector, a thriving arts and culture scene, and steady economic expansion. This guide aims to equip commercial property owners, potential buyers, and investors with critical insights into the local real estate market, offering practical information on property types, valuation, leasing, financing, and other key considerations unique to Asheville.

II. What is Commercial Real Estate?

Commercial real estate encompasses any property intended to generate income. The primary categories include:

• Office: High-rise, mid-rise, garden-style, flex spaces, and converted homes.
  
  

• Retail: Shopping malls, standalone stores, strip centers, and mixed-use developments.
  
  

• Industrial: Warehouses, manufacturing facilities, and research and development sites.
  
  

• Land: Parcels available for future development, subject to local zoning regulations.
  
  

• Specialty Properties: Hospitals, churches, hotels, breweries.
  
  

• Hybrid/Flex Spaces: Combinations of office, warehouse, or showroom uses.
  
  

Unlike residential properties, commercial real estate transactions typically involve more complex leases, financing arrangements, and valuation methods.

III. Asheville-Specific Market Overview

Economic Drivers: Tourism (including breweries and hospitality), healthcare, and a growing technology sector are key pillars of Asheville’s economy.

Current Supply and Demand Trends:

• Office: Stable demand in Downtown and South Asheville, with strong interest in adaptive reuse of historic buildings.
  
  

• Retail: Growth in mixed-use projects, especially in the River Arts District and along Haywood Road.
  
  

• Industrial: High demand and limited supply, particularly for last-mile distribution and craft manufacturing.
  
  

Zoning Overview: Buncombe County’s zoning maps designate key districts including EMP (Employment), CI (Commercial-Industrial), and several mixed-use overlays. For details, refer to Buncombe County’s official zoning resources.

Key Development Areas:

• River Arts District: Adaptive reuse and creative industries.
  
  

• 
  Downtown Asheville: Offices, hotels, entertainment.

• South Asheville: Rapid growth corridor along Hendersonville Road.
  
  

Demographics:

• Population growth: Approximately 1.5 percent annually.
  
  

• Median household income: Approximately $60,000.
  
  

• Workforce: Diverse and supportive of hospitality, healthcare, and technology sectors.
  
  

IV. Classifications of Commercial Properties

• Class A: Modern, high-quality properties with premium amenities and prime locations (e.g., Biltmore Park Town Square).
  
  

• Class B: Well-maintained, often older properties that may include adaptive reuse buildings in Downtown Asheville.
  
  

• Class C: Older structures with fewer amenities and more deferred maintenance.
  
  

V. Factors Affecting Property Desirability

• Location: Visibility, signage potential, and traffic counts (data available from the North Carolina Department of Transportation).
  
  

• Accessibility: Proximity to major highways including I-40 and I-26.
  
  

• Labor Market: Diverse workforce; key industries supported by data from the Bureau of Labor Statistics, the Asheville Chamber of Commerce, and the Economic Development Coalition.
  
  

• Utilities and Services: Providers such as Duke Energy, Skyrunner, and AT&T; broadband availability varies in certain mountain areas.
  
  

• Proximity to Housing: Median home prices (approximately $425,000) and low apartment vacancy rates (~3 percent) influence workforce availability.
  
  

VI. Understanding Leases

• Lease Types:
  
  

  • Gross Lease: Landlord covers most operating expenses.
    
    

  • Net Leases (Single, Double, Triple Net): Tenant pays some or all operating expenses.
    
    

  • Percentage Lease: Typically used in retail; tenant pays base rent plus a percentage of sales.
    
    

  • Graduated and Index Leases: Rent adjusts periodically based on a pre-set schedule or an inflation index.
    
    

  • Full-Service Lease: Landlord provides all services, commonly found in office buildings.
    
    

  • Ground Lease: Long-term lease of land for development purposes.
    
    

• Key Clauses: Signage rights, maintenance responsibilities, trade fixtures, assignment and sublease provisions, and right of entry.
  
  

• Local Considerations: Asheville’s signage regulations and zoning requirements are critical factors in lease negotiations. Additionally, 1031 exchanges can facilitate tax-deferred reinvestment opportunities.
  
  

VII. Valuation Methods

• Income Approach: Based on net operating income and market cap rates, which typically range from 6 to 8 percent for office and 5 to 7 percent for industrial, depending on location and property quality.
  
  

• Market Approach: Uses comparable sales data from platforms such as CoStar, LoopNet, and the MLS, often supplemented by Chamber of Commerce information.
  
  

• Asset Approach: Focuses on replacement costs, particularly for specialized properties such as breweries and hotels.
  
  

VIII. Financing Options

• Local Lenders: Asheville Savings Bank, First Bank, and HomeTrust Bank are among the institutions with expertise in commercial real estate financing.
  
  

• SBA 504 Loans: Attractive for small businesses seeking property ownership with lower down payments and favorable terms.
  
  

• Owner Financing: Provides flexibility but requires thorough legal review.
  
  

• Blanket Mortgages: Suitable for investors acquiring multiple properties.
  
  

• Economic Development Agencies: Organizations such as the EDC and Mountain BizWorks can assist with business resources and, in some cases, financing guidance.
  
  

IX. Special Considerations for Start-Ups

• Many start-ups prefer flexible lease arrangements or shared workspaces (e.g., Hatchworks).
  
  

• SCORE Asheville offers free mentoring and business planning assistance.
  
  

• The Asheville Chamber of Commerce provides networking opportunities and local market insights.
  
  

• It is essential to review the business plan and financial projections before entering into a lease.
  
  

X. Other Local Considerations

• Environmental Assessments: Phase I and Phase II studies are recommended; local environmental consultants can provide guidance.
  
  

• Utility Reliability: Service quality varies by location; contact Duke Energy and local internet providers for details.
  
  

• Broadband Access: Some mountain communities may face connectivity challenges.
  
  

• Short-Term Rentals: Zoning compliance is strictly enforced, particularly in mixed-use developments.
  
  

XI. Working with Professionals

• Real Estate Agents, Attorneys, and Accountants: Local experts provide valuable market knowledge and help protect your interests.
  
  

• Intake Sheets and Checklists: Useful for evaluating property condition, financials, and regulatory compliance.
  
  

• Closing and Lease Review: It is advisable to engage experienced local real estate attorneys.
  
  
  

Aligning real estate decisions with long-term business objectives is critical to success in Asheville’s evolving market. Ongoing research, local partnerships, and the guidance of trusted professionals are essential for making informed and strategic investments.

If you’re ready to take the next step—or simply want to explore your options—reach out to Patrick with Industry Property Group.


With his extensive knowledge of the Asheville commercial real estate market and commitment to client success, Patrick can provide the personalized guidance you need to navigate opportunities with confidence.

Contact Patrick today to discuss your goals, explore the latest market trends, and position your business for success in Asheville.