Heading into the second half of the year, the momentum in Nashville’s office sector shows no signs of slowing.
The already low vacancy rate for Class A office space has dropped even further, from 5.4 percent in first-quarter 2014 to 4.4 percent in second-quarter 2014, according to JLL’s Nashville Office Insight Q2 2014 report. The overall direct vacancy rate also continues to decline, from 9.9 percent in the first quarter to 9.1 percent in the second quarter.
“The market continues to tighten,” said Tom Hooper, Vice President of Office Leasing in JLL’s Nashville office. “Many of the larger leases signed so far this year are with current tenants that are growing, and new businesses continue to relocate to Nashville. It’s a very healthy and active market.”
The tight market conditions will persist, he noted, at least until the new supply of projects comes online next year.
The major office projects in the pipeline include One Franklin Park in Cool Springs (277,000 square feet; scheduled delivery in Q3 2014), Gulch Crossing in Midtown (205,000 square feet; expected delivery in Q2 2015) and oneC1TY in Midtown (110,000 square feet, expected delivery in Q1 2015).
The Brentwood submarket remains particularly hot, with three large lease signings in the second quarter: Corizon Health (90,747 square feet), Kirkland’s (76,000 square feet) and Brookdale Senior Living (40,653).
For more exclusive JLL research, visit the JLL Tennessee website.