In Cushman & Wakefield's national Q3 office report, Nashville played a starring role, both for its construction pipeline and exceedingly tight office market.
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First, Nashville has the largest pipeline of new construction in the country, relative to the size of its inventory. The 3.7M SF in the dirt here represents 10.5% of the market’s total inventory. More than 1M SF is build-to-suit and most of the remainder in the near-term pipeline is pre-leased, Cushman & Wakefield Nashville managing principal Doug Brandon tells us. "We exited the last recession a little ahead of most of the country and have only accelerated since."
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Also, the lowest vacancy rate in the nation is Nashville at 4.7%, decidedly besting second-lowest Midtown South in Manhattan (6.7%). "Developers are responding to Nashville’s undersupply of office product, but we don’t see a significant slowdown in absorption and rent growth due to strong, steady organic business expansion and ongoing diversification of Nashville’s economy," Doug says. Of the 87 markets tracked by Cushman & Wakefield, the vacancy rate declined in 57 and only increased in 22; the rest were unchanged.
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