Nashville office market report
Q1 2022
The Nashville office market showed positive signs of improvement as the market rebounds from uncertainties surrounding the future of office space during the height of the pandemic. The outlook for 2022 is positive as tenant demand and market activity continue to pick up.
Construction
At the end of the first quarter, Nashville’s office market had 2.77 msf under construction. First quarter deliveries added only 112k sf to inventory, with an additional 640k sf expected to complete by year-end.
Net absorption
Nashville’s office market had a strong start to the year with over 270,000 sf of positive net absorption recorded at the end of the first quarter, due mostly in part to Genesco moving into their 200k sf headquarter space in the Airport North submarket
Direct asking rent
Rising vacancies and increased sublease offerings have attributed to rent softening across the Nashville market. Average rents decreased 0.6% year-over-year, ending the quarter at $30.33 psf. Class A rents continue to see upward movement, led by new construction asking rents.
Sublease availabilities
Nashville continues to see record volumes of sublease space on the market, surpassing 2.0 msf of sublet office space available at end of the first quarter.
Vacancy
Direct and sublease vacancy both rose in the first quarter coming in at 17.9% overall vacancy. The market wide rise in vacancy is not only attributable to tenant retractions, but also a steady stream of speculative construction deliveries that have hit the market with significant vacancies.
Investment Sales
Due to low interest rates and pent-up demand among investors, pricing has seen exponential growth in recent years. Nashville’s office investment sales totaled over $250 million year-to-date, with numerous urban office properties trading during the first three months of 2022.
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Get in-depth office market reports and insights from commercial real estate experts in the Greater Nashville area. Avison Young advisors look at Nashville commercial real estate activities and the latest Nashville statistics to provide you expert market research on Nashville's office properties.
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