Category Archives: Office Leasing

Q4 2015 Office Insight

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A historic quarter for a historic year: sales prices, sales transactions, rental rates, vacancy rates, construction levels, commute time

q4 15 overview table

Property sales soar past the crane-filled horizon

Over $820 million in office investment transactions closed in Nashville in 2015, making it the most active year ever and representing a 35.4 percent… Read More

No deliveries make Nashville an anxious market in Q3 2015

quarter snapshot 3 q 2015

Construction cannot keep pace with increasing demand
The third quarter is another that weighs in favor of Nashville landlords. For the fourth-consecutive quarter, office market vacancy rates have continued to decline at a steady 10.3 percent per quarter. The market hit yet another historic low, landing at an overall 7.3 percent and at 2.8 percent for Class A, compared to last quarter’s 8.5 percent and 3.3 percent. Vacancy rates are expected to continue falling until enough product comes online; however, as fast as new buildings come on the market, they are leased. MarketStreets’ 205,000-square-foot, Class A office building, Gulch Crossing, has been the only delivery this year, and despite its historic, high-market price tag of $37.50 per square foot, the building is already 86 percent leased. The Gulch Crossing story demonstrates the height of demand in the Nashville market.

New product provides a silver lining
To the relief of the office market, there are ten buildings and a total of 2,035,446 square feet under construction. Nashville has not seen this sort of construction activity in its history. With an average $34.65 per square foot for new office space, rental rates for these buildings will lead the way for Nashville’s Class A rental rates to surpass those of larger markets. Product is already 81.9 percent preleased. Downtown will see the largest growth, gaining 1,274,000 square feet. The next closest submarket, Brentwood, will gain 487,902 square feet. Next quarter, Midtown will receive the first of these deliveries with the completion of oneC1TY Building 6, which will add 110,000 square feet of Class A office space to the market. It is already 97 percent preleased.

The elephant in the room: parking
With an average of 80 people moving to Nashville per day, parking is a central barrier to Nashville’s growth. According to the Nashville Business Journal, there are 35,000 people working downtown – where there are only 20,000 available spaces. Annual tourism has reached roughly 12 million visitors per year. While this is a powerful sign for economic development, tourism adds to the downtown parking disparity. Developers are faced with the dilemma: parking structures vs. office buildings. The metro government and the Metropolitan Development and Housing Agency have committed to a combined $45.5 million in parking improvements. By early 2017, the Nashville Public Library garage will create 350 more spaces, and the parking garage development at the intersection of 5th Avenue North and Church Street will add another 1,010 spaces. These improvements will provide a strong start to confronting the parking problem by increasing volume by roughly 6.8 percent. In the suburban market, parking is equally as challenging. Existing buildings are no longer capable of meeting tenant parking demands for higher density options. It is time to address the elephant in the room.

For more exclusive JLL research, download the full report, visit the JLL Tennessee website and follow @JLLNashville on Twitter.

Nashville’s Office Construction Sets Record at Mid-Year 2015

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Vacancy rates continue to decline as Class A space is in high demandProperty Clock Q2 2015

Mid-year 2015 marks another historic low for vacancy rates in Nashville’s office market. Compared to 10.4 percent in the second quarter of 2014, overall market vacancy for the second quarter of 2015 finished at 7.5 percent, according to JLL’s new Nashville Office… Read More

On Fire: Nashville’s Office Market Continues to Heat Up During the Cold of Winter

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Nashville’s sizzling office market showed no signs of slowing down in the first three months of 2015, ending the first quarter with a 7.5 percent overall vacancy rate, a near-historic low, according to JLL’s new Nashville Office Insight Q1 2015 report. The overall average direct asking rent climbed slightly from the preceding quarter, to $22.35 per square foot, still well below the national average.

Nashville Map CroppedRead More

Strong Finish for Nashville’s Office Market Keeps it on the National Radar

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Nashville’s office sector ended 2014 on a strong note to remain on the national radar. The demand for Class A office space shows no signs of slowing down in both the urban and suburban markets, and the vacancy rate for Class A office space in the metro area continued to decline, reaching 3.5 percent overall, according to JLL’s new Nashville Office Insight Q4 2014 report.Q4 2014 Key MarketRead More

Office Leasing Activity Gains Momentum in Nashville

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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… Read More