Nashville’s Commercial Growth is Still Off The Charts

2019 Nashville Commercial Real Estate Update

If you feel like everyone is moving to Nashville, you might not be far off. As we’ve reported in past years, the city’s growth is still going strong. 

Locals in Nashville have witnessed the city’s explosive growth firsthand. Now, as thousands relocate, the rest of the country is taking notice. 

Nashville has consistently made list after list of the top places to work and live. SmartAsset named Nashville the #3 best city for young professionals. The US News & World Report named Nashville the best place to live in Tennessee and the 15th best place to live in the entire country.

Occupancy: Nashville’s Commercial Growth is Still Off The Charts

The number of people flocking to Nashville is significantly increasing commercial occupancy. According to the Colliers Q2 2019 Nashville Office Report, big-name companies are buying large amounts of office space. Amazon and Postmates leased nearly 600,000 square feet of commercial property in the second quarter of 2019. 

Vacancies in Class A office buildings came in at only 9% in mid-2019, down from 10% in the first quarter of 2018. For the seventh quarter in a row, vacancies in the 20 largest buildings in the downtown submarket have dropped, with the second-quarter vacancy rate at 8.5%. According to Colliers’ Q2 2019 Industrial Report, we see even less vacancy, at 5.2%, making it the sixteenth quarter in a row that the occupancy rate was above 94%. 

Rent: Cost of Renting Space in Nashville Continues to Grow

Nashville’s growth is unsurprisingly driving up rental rates as occupancy increases. For new construction downtown, Colliers reports that rates exceed a shocking $40 per square foot. Current rentals are following suit with the average in Green Hills and Music Row at $38.30 and, with the West End a close second at $33.30. As for industrial space, the average rental rate hit a record high at $12.86 per square foot. 

These numbers reflect a growing demand for rental space in a city where developers can barely keep up with new business’ needs. 

As new business in Nashville skyrockets, Inc. named Nashville the #4 best place to start a business in America. Site Selection Magazine named Nashville #1 in South Central United States for regional workforce development

Construction: Nashville Developments Continue to Rise  

The Colliers report shows that as developers try to keep up with demand, developers have added 911,546 square feet to the market this year alone. Plus, an additional 3.85 million square feet of office space is currently under construction across the Nashville market.

In what The Tennessean is calling the “largest land development in decades,” a 13-acre development is coming to East Nashville’s waterfront. The development, to be called Landings at River North, will include apartments, offices, and retail space. Additionally, the area will feature a pedestrian bridge between Germantown and East Nashville as well as a public park and a marina. Construction on this project will begin in early 2020. 

Another massive development is coming to The Gulch as one of downtown Nashville’s most expensive redevelopment projects. The Nashville Yards is a $1-billion-dollar project that will be the new home for the Amazon’s Operations Center of Excellence. The 20-story high rise will be over 500,000 square feet. 

In addition, the luxury Grand Hyatt Hotel will open in the fall of 2020 with nearly 600 rooms and a rooftop pool and bar. In the center of this downtown development, a new concert venue will seat up to 4,000 people and will include an entertainment district with a nightclub, movie theater, multiple restaurants, and a bowling alley. 

We love being a part of Nashville’s booming growth. DPM Care takes great pride in knowing that our Nashville customers choose us to deliver high-quality carpet, floor, and upholstery cleaning services. We look forward to the opportunity to continue growing our business as the city develops to new heights. 

Contact us to learn more.