Nashville industrial real estate market reports
Q2 2021: Nashville's industrial sector continues to fare better than other asset types in the wake of the COVID pandemic.
Nashville's industrial construction pipeline remains robust, with the market experiencing its largest growth cycle in decades. An additional 2.7 MSF of new industrial inventory is expected to be added to the already 6.4 MSF delivered this year. Even with new supply coming online, Nashville is sitting at a record low vacancy rate YTD 2021 at 3.6 percent. Given low vacancy rates, averages asking rents have increased to $6.55 PSF, up 17.6 percent since 2019.
Industrial leasing activity
Leasing for the first half of 2021 at 3.48 MSF is down 35% from this time last year, as 5.34 MSF was leased during the first half of 2020.
Industrial net absorption
Absorption through mid-year remains healthy and on pace with levels seen pre-pandemic.
Industrial vacancy rate
Nashville is at a historic low vacancy rate YTD 2021. Although vacancy experienced a temporary uptick in 2019, it has been on a steady decline for over a decade.
Asking rents have continued to climb, assisted by an overall low vacancy rate as Nashville's demand has remained strong.
Given Nashville's strong demand for space and historic low vacancy rates, concessions and tenant improvements have not budged during the pandemic, providing landlord leverage.
Investment dollar volume
Nashville experienced a strong 2020, despite a pause in national sales activity for all asset classes due to the risk-pricing crisis of the pandemic. Despite the crisis, Nashville hit a high of $900M in 2020, and is currently experiencing a strong 2021 at $520M closed deals YTD.
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