Nashville is challenging historic trends in supply and demand and the effects on rent. Supply is outpacing demand, yet rent continues to grow. Between Q4 2016 and Q1 2017, total vacancy increased 192 basis points, respectively from 6.2 percent to 8.1 percent. Nonetheless, direct average asking rent in 2017 increased 218 basis points, respectively from $23.59 to $25.78. Vacancy most sharply increased in suburban product, at 39 percent, and rent also grew the strongest in suburban product, at 12.5 percent.
- In a unique market dynamic, rent is increasing (9.3 percent Q4 2016 to Q1 2017) and vacancy is increasing (31.3 percent Q4 2016 to Q1 2017).
- Suburban and Urban vacancies are the closest they’ve been since the recession (respectively 7.7 and 8.9 percent).
Having a vacancy that is consistently the lowest in the country, Nashville market fundamentals tell a powerful story about rental rate and vacancy equilibriums. Rent will continue to grow until demand lessens.
- Collectively tenants are seeking 2.4 million square feet of space.
- 6 million square feet of new product is projected to deliver by Q4 2017, 64.6 percent of which is preleased.
Visit our Nashville Research Group page for additional market insight: http://www.jll.com/tennessee/en-us/Pages/RemoteResearch.aspx?URL=http://www.jll.com/united-states/en-us/research/8167/us-nashville-office-insight-q1-2017-jll