Commercial Real Estate Insights
The second quarter of 2026 continued the gradual stabilization of Western North Carolina’s commercial real estate market. Transaction volume declined compared to the same period last year, but the underlying fundamentals—particularly vacancy rates—show a market that is still tight, competitive, and active.
After Q1 brought a welcome return to “business as usual,” the second quarter offered additional signs of predictability. Buyers, tenants, and investors continued to move forward when the location, pricing, and long-term use of a property made sense. The result was not a period of quick growth, but one of measured confidence and more disciplined decision-making.
Retail remained one of the market’s clearest strengths. Vacancy tightened to just 1.3%, down from 1.5% in the first quarter and 1.7% during the same period last year. Retail leasing activity also increased slightly, with 25 transactions recorded compared to 23 in Q2 2025.
Continued national recognition of Asheville’s food, beverage, outdoor recreation, and arts communities is helping support demand for restaurant, service, and experience-driven retail concepts. As the region enters its peak tourism months, improving foot traffic and stronger leasing confidence are encouraging signs for property owners, tenants, and investors evaluating opportunities throughout the area.
The office sector also made steady progress, continuing to perform differently from many larger national markets. Local office vacancy declined to 2.2%, compared to 2.5% in Q1 2026 and 2.9% during the second quarter of 2025.
Although higher borrowing costs continue to limit some large-scale institutional activity, regional employers, professional service firms, healthcare users, and small businesses are still seeking viable, well-located office space. In Western North Carolina, practical business needs are proving more influential than broad narratives surrounding the office sector.
Industrial activity was more restrained. Nine industrial leases were recorded during the quarter, compared to 21 during the same period last year. Vacancy reached 4.4%, higher than the 3.1% reported in Q2 2025 but slightly improved from 4.6% in the first quarter. This suggests the sector may be moving toward a more balanced environment after several years of exceptionally limited availability.
Multi-family and land properties also recorded continued activity, although sales volume remained below the previous year’s levels. Altogether, Q2 shows a market becoming less dependent on sharp rebounds or sudden slowdowns and more defined by consistent demand, careful evaluation, and realistic expectations heading into the second half of 2026.
Q1 2026 Commercial Sales Activity Review:
- 12 industrial transactions totaling $20 million
- 17 office transactions totaling $12.7 million
- 27 retail transactions totaling $39.6 million
- 9 multi-family transactions totaling $29.4 million
- 13 land transactions totaling $16 million
Q1 2026 Commercial Lease Activity Review:
- 9 industrial lease transactions, with a vacancy rate of 4.4%
- 27 office lease transactions, with a vacancy rate of 2.2%
- 25 retail lease transactions, with a vacancy rate of 1.3%
All information represents 2026 data as provided by CoStar for the region.
Download our full Quarterly Market Report.
About the Featured Listing
T.S. Morrison Building Properties in Asheville
19 RANKIN AVENUE, UNIT 1B | $2,400,000
39 NORTH LEXINGTON AVENUE, UNIT 2 | $1,800,000
39 NORTH LEXINGTON AVENUE, UNIT 5 | $432,400
Listed by: Chris Mansfield, RA, Member Associate, Society of Industrial and Office Realtors®
Three distinctive downtown Asheville locations are available within the T. S. Morrison building, offering flexible ownership options in one of the city’s most walkable commercial corridors. The offerings include:
- 19 Rankin Avenue Unit 1B, a ±4,768 SF creative office/flex space.
- 39 N. Lexington Avenue Unit 2, a ±3,714 SF adaptive reuse asset currently operating as Sweet Peas Hostel
- 39 N. Lexington Avenue Unit 5, a ±806 SF ground-level garage/flex condo
Together, these listings offer rare versatility for a variety of use concepts in an extremely desirable, high-traffic corridor.
All real estate is local. In order to make confident real estate decisions, it is important for you to have timely and neighborhood-specific information. For more information about our commercial real estate market, ask your NAI Beverly-Hanks agent or click here.