223 Commerce St 11,250 SF Retail Building Kingsport, TN 37660 $3,189,820 CAD ($283.54 CAD/SF)

Rare Two-Address Downtown Asset, 100% Occupied with Owner-Operator Flexibility — Four Active Tenants Including a $500,000 Turnkey Commercial Kitchen | Qualified Opportunity Zone, TIF, PILOT, and Tennessee Main Street District
Building Size: ±17,750 SF total — 223 Commerce ±11,250 SF + 215 Commerce ±6,500 SF
Lot Size: ±0.40 acres combined (±17,424 SF)
Zoning: B-2 Central Business District (City of Kingsport)
Special Districts: Qualified Opportunity Zone, TIF District, PILOT District, Tennessee Main Street
Flood Zone: B/X — outside the 100-year floodplain (buyer to verify)
Occupancy: 100% leased — all leases temporary, structured to deliver vacancy to an owner-operator
Sale Type: Investment or Owner-User
The Property
Kingsport's steady, measured growth is its quiet advantage — no boom-cycle overbuilding or vacancy spikes. Commercial fundamentals here are unusually tight — Office 4.0% vacancy, Retail 1.5%, Multifamily 5.6%, all outperforming national averages. What makes this property a rare opportunity is the location: the historic core of downtown, where the inventory is finite and effectively irreplaceable. Kingsport buying power per dollar of retail rent is 10% to 24% higher than Knoxville, Nashville, and Asheville, NC.
215 & 223 Commerce Street is one of Downtown Kingsport's most distinctive commercial assets — approximately ±17,750 SF of flexible space contained within a single building yet operating under two separate street addresses. That multi-address configuration is genuinely rare for the market: it gives an owner the footprint of a larger facility while preserving the option to operate, brand, or sub-lease as multiple distinct storefronts and suites under one roof.
The building is currently 100% occupied across five active tenants — a tavern with a full commercial kitchen, a craft distillery, a high-end fitness operator, a destination retail concept, and a supplemental storefront. Every lease is intentionally short-term, structured so the building can deliver flexible vacancy to an owner-operator. A buyer underwrites a fully stabilized, in-place rent roll from day one, then chooses which space(s) to occupy as leases roll.
F&B Infrastructure
Anchor tenant Ole Crow Tavern has invested ~$500,000 in a fully upgraded commercial kitchen and bar build-out — hood system, line equipment, and finishes in place. That turnkey F&B infrastructure would be cost-prohibitive to replicate, giving the next operator a move-in-ready restaurant platform. King City Distillery operates a working craft distillery and tasting room under B-2 zoning.
Industrial-Door Bay — 223 Commerce
The 223 Commerce gym space features industrial-size overhead doors — unusual downtown — making it convertible to higher-clearance, drive-in uses: supply company, contractor showroom, HVAC/electrical distributor, showroom, or light fabrication. Few Downtown Kingsport spaces accommodate that.
In-Place Tenants — Vacancy on Demand
Ole Crow Tavern (anchor F&B, ~$500K kitchen build-out) | King City Distillery (craft distillery + tasting room) | G1 Elite (fitness, industrial-door bay) | Found Objects (destination retail) | supplemental storefront. All leases temporary by design — the building can deliver any combination of spaces back to ownership without a tenant displacement fight.
Three Owner-Operator Paths
Income first — hold the rent roll, step into spaces as leases roll. Operator first — take the industrial-door bay for an owner-occupied concept day one, collect rent from the rest. Reposition — recapture the building over time as single-tenant, mixed-use, or hospitality redevelopment under B-2 zoning.
B-2 Central Business District
Kingsport's most flexible commercial zoning. Permits restaurants, cafes, bars, brewpubs, craft breweries (up to 10,000 SF production), craft wineries, distilleries with tasting rooms, retail of all categories, office and professional uses, medical, personal services, entertainment and event venues, hotels and B&Bs, education, residential (except single-family detached), and the full light-trade/industrial-showroom set supported by the 223 Commerce industrial-size doors. Buyer to confirm specific uses with City of Kingsport.
Incentives & Tax Advantages
Qualified Opportunity Zone — defer capital gains, reduce the deferred gain, and eliminate federal tax on new OZ gains after a 10-year hold with no depreciation recapture. Additionally eligible for the City of Kingsport's Façade Grant, Redevelopment Grant, and Downtown Kingsport Loan Program (buyer to verify with City and Downtown Kingsport Association). Buyer should consult their CPA on OZ eligibility and current IRS rules.
Location
Downtown Kingsport core — steps from Broad Street, Church Circle, and the Heritage Trail. Purpose-planned urban fabric — 44 walkable blocks, 1,800+ free public parking spaces. Active revitalization district with new utility and streetscape investment. Growing residential base — Bridwell on Broad, Brickyard Village (400+ new residences nearby); Downtown lofts appraising at $250+/SF. Event-driven foot traffic — Fun Fest, Santa Train, First Thursday Sip & Stroll, Farmers Market. Outdoor recreation — Holston River, 10-mile Greenbelt, Bays Mountain Park. Access: ~1 mile to I-26 / I-81 corridor; within a day's drive of ~70% of the U.S. population; ~14 miles to Tri-Cities Airport. Anchored by Eastman Chemical, Holston Valley Medical Center, and the Kingsport Academic Village.
Market & Value-Add Opportunity
• Adaptive reuse averages 16% less expensive and 18% faster than ground-up construction, often with 10–15% higher ROI (Deloitte). Deals actually pencil.
• Buying a stabilized asset, ask: who's capturing the upside — you or the developer cashing out? Acquiring vacant or underutilized property and executing a heavy value-add / adaptive reuse strategy lets you create the value instead of paying someone else's margin.
• 1.2 million population within a 60-mile radius
• Great Smoky Mountains National Park = 12.5mm annual visitors
• Entire Pigeon Forge area sees 21mm+ annual visitors
Who This Suits
Restaurant/hospitality owner-operator wanting a $500K turnkey kitchen | supply company, distributor, or contractor showroom needing drive-in industrial-door capability | brewpub, distillery, or winery operator | mixed-use operator splitting the two addresses | adaptive-reuse developer recapturing the building as temporary leases roll (loft comps $250+/SF) | investor positioning for Downtown Kingsport upside with Opportunity Zone advantages.
Sold together as one building in a single transaction. Tours available upon request. Contact the listing agent.
All information herein has been obtained from sources deemed reliable; no representation or warranty is made as to accuracy. Prospective purchasers should verify square footage, zoning, lease structure, Opportunity Zone boundaries, incentive eligibility, flood zone, and permitted uses with the appropriate authorities and their own advisors.