During a boom, markets hope for a movement toward equilibrium in supply and demand, which would make a slowdown less painful. There's some evidence the office market in Nashville is edging toward equilibrium.
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“Demand is matching supply for most product types," CBRE VP of investment properties Morgan Hillenmeyer tells us. According to CBRE Research, there was about 3.6M SF of office space under construction in Q2 2016, but that isn't a massive wave of spec space washing over the market, since over 80% is pre-leased. The overall office vacancy in Nashville in Q2 2016 was at an all-time low of 6%.
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"While there's more speculative development than there has been historically in Nashville, the city has evolved," Morgan adds. "People and companies continue to move here, which has supported new development well. As long as development stays measured and new construction rents are acceptable, vacancy should remain low.”
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