Average asking rent Total vacancy rate
Nashville Office Market
Nashville office market
Commercial real estate giant CBRE reported rosy details for Nashville’s office market last year: Vacancy rates were at record lows and asking rental
rates were at record highs. The city’s technology and financial-services
fields are fueling the growth, and a California-based investor made a
$160 million purchase of five Class A properties in the suburban community of Franklin.
Last year, leases by Xerox Commercial Solutions, Universal Health
Solutions, architecture and design company Houzz, and Warner Music
Group were the city’s most significant in terms of size, totaling more than
215,000 square feet, according to commercial real estate company JLL.
The city’s average asking rent for office space reached $25.46 per square
foot as of second-quarter 2017, JLL reports.
What the locals say
“Strong employment growth and the population of young
adults have been a boon to Nashville’s multifamily market,
with 96 percent occupancy since 2011. … Memphis, Knoxville and Chattanooga are a few Tennessee metros that announced a combined 10,900 jobs [between January 2016
and January 2017]. … Health care and education make up the
largest office market share of any industry in the Nashville
region, totaling nearly 8 million square feet. … Forbes recently
released a report that named Nashville the city with the most
high-wage growth since 2011 — out of 70 of the largest labor
markets in the country.”
By Neil Pierson
The Volunteer State thrives on health care and tourism
College-football fans often watch the Tennessee Volunteers on Saturdays
each fall, but unless you live in the Volunteer State, you may not know the
Two occasions in the 19th century helped cement the name — first when Maj.
Gen. Andrew Jackson led thousands of volunteer soldiers from Tennessee
at the Battle of New Orleans during the War of 1812; and again in 1846,
when 30,000 Tennesseans, more than 10 times the requested number,
answered a call for reinforcements during the Mexican-American War.
In 1819, Jackson helped found the city of Memphis, which is Tennessee’s
second-largest city today. Together with Nashville, the capital and largest
city, the metropolises account for about 20 percent of the state’s population.
Tennessee’s population grew at a steady pace of 4. 8 percent between 2010
and 2016, and now has a population of more than 6. 6 million, according to
the U.S. Census Bureau. Murfreesboro, which sits about 35 miles southeast
of Nashville, was the 10th-fastest growing city in the nation year over year in
July 2016, U.S. Census data show.
Tourism is a key industry in Tennessee, topping $1.5 billion in state and local
sales-tax revenue, and supporting nearly 153,000 jobs in 2015, the state’s
Department of Tourist Development reports. The Tennessee Aquarium in
Chattanooga is one of the largest freshwater facilities in the country and
contributes $115 million a year to the local economy. Great Smoky Mountains National Park, encompassing 800 square miles along the border with
North Carolina, drew more than 11 million visitors in 2016, far and away the
busiest national park. And the National Civil Rights Museum in Memphis has
a collection of 260 historical artifacts and 40 films, as well as an exhibit that
offers a glimpse into the room at the Lorraine Motel where Dr. Martin Luther
King Jr. was assassinated.
Tennessee’s economy is above average in terms of gross domestic product (GDP), ranking 18th in 2016 at $328.8 billion, the U.S. Department of
Commerce reported. Last year, the largest industry sector was finance, insurance, real estate, rental and leasing, which accounted for 16. 5 percent
of the state’s GDP. The cost of living in Tennessee is relatively low, with the
state’s median home value and median gross rent being well below national averages, according to the Tennessee Department of Economic and
Community Development. The percentage of Tennessee’s population that
lives below the poverty level is 18. 3 percent, well above the national average of 15. 5 percent, however. n
Director of research,
Colliers International, Nashville