The Nashville Commercial Real Estate Market

Reading Time: 6 minutes

Nashville is one of the fastest-growing economic centers in the United States and represents a hotbed of promising development and commercial real estate investment opportunities.

Crexi connects parties interested in Nashville commercial real estate to hundreds of viable properties and the tools needed to research, analyze, and acquire the perfect fit. 

Brokers in Nashville and those representing Nashville property for sale also rely on Crexi to manage leads, list assets, and navigate more deals to closing, all while saving time. As of this writing, Crexi’s commercial real estate tools have assisted brokers in closing more than $440 billion in property value and marketing over $5 trillion in overall assets.

Crexi proudly supports Nashville, Franklin, Murfreesboro, Hendersonville, Lebanon, and the surrounding areas as the market’s fastest-growing online CRE platform.

The State of Nashville Commercial Real Estate 

Nashville, the capital of Tennessee, is known as “Music City” and is a thriving and culturally rich metropolis in the Southeastern United States. Its diverse economy is driven by key industries such as healthcare, technology, manufacturing, entertainment, and tourism. The city’s strategic location – within a one-day drive of 50% of the US population – and its well-developed transportation infrastructure make it an essential hub for commerce, logistics, and tourism, supporting economic growth and enhancing the quality of life for residents and visitors alike.

Home to top colleges and universities, the metro area fosters a skilled workforce contributing to its success. The local economic development department focuses on attracting and supporting businesses within key industry sectors, further strengthening the city’s economic landscape. 

Nashville’s diverse economy, strategic location, and skilled workforce create a stable environment that attracts businesses, driving demand for commercial real estate. Investors and tenants can capitalize on this growth by identifying promising opportunities in office spaces, retail properties, warehouses, and other commercial real estate in Nashville.

Nashville Regional Breakdown

Metropolitan Nashville has been experiencing significant population growth in recent years, driven by factors such as a strong economy, diverse job opportunities, and an appealing quality of life. The city’s booming industries, including healthcare, technology, manufacturing, and entertainment, have attracted professionals and families alike. Additionally, the region’s relatively low cost of living, vibrant cultural scene, and renowned music industry contribute to its appeal to new residents.

  • Nashville is the capital of Tennessee, home to nearly 684,000 in the city and over 2 million in the metropolitan area.
  • The population has increased by about 68% since 2000, according to data from Macrotrends.
  • The largest cities include Murfreesboro, Franklin, Hendersonville, Brentwood, Smyrna, Gallatin, and Mount Juliet.
  • The median age is 37.2, a little less than the figure in Tennessee and the US.
  • Per capita income is $40,730, and median household income is $72,725, both figures about 20% higher than in the state and the nation.

Nashville Job Market

Diverse industries, including healthcare, technology, manufacturing, entertainment, and tourism, drive Nashville’s thriving economy. The city’s strong job market consistently outperforms national figures, offering numerous opportunities for professionals across various fields. Key sectors such as healthcare and technology have attracted innovative companies and skilled talent. The world-renowned music industry and booming tourism sector further contribute to the city’s vibrant economic landscape.

  • GDP is over $163 billion and has increased by 84% over the past ten years.
  • The unemployment rate is at a historic low of 2.1%, as reported by the BLS.
  • Major industry sectors in Nashville include healthcare management, automobile production, finance, higher education, technology manufacturing, music production, and tourism.
  • More than 52,000 businesses are located in the region, according to the Nashville Area Chamber of Commerce.
  • The largest employers include Vanderbilt University Medical Center, Nissan North America, HCA Healthcare, and Amazon.
  • The biggest companies in the Nashville metropolitan area include Dollar General, Bridgestone Americas, Asurion, Tractor Supply Company, and SmileDirectClub.
  • Downtown Nashville has numerous office, retail, multifamily, and mixed-use development projects under construction.
  • Over 40% of the residents have a bachelor’s degree or higher, about 1.3 times the rate in Tennessee and about 20% higher than in the US.
  • Top colleges and universities include Vanderbilt University, Belmont University, Tennessee State University, and Lipscomb University.
  • Nashville’s transportation infrastructure includes interstate highways, including I-40, I-65, I-24, Nashville International Airport (BNA), several major trucking companies, and Class I railroads.
  • Some of the largest cities within a one-day drive of Nashville include Atlanta, Chicago, St. Louis, Louisville, and Indianapolis.

Nashville Industrial Market

The industrial market in Nashville experienced robust activity in the last quarter, with the East submarket witnessing the highest volume of transactions. Major leasing activities reported by Cushman & Wakefield included significant deals by Geodis, Averitt Express, and Kloeckner Metals, among others. 

During the pandemic, Nashville’s industrial market saw substantial activity from the e-commerce and third-party logistics (3PL) industries. In the past year, demand has diversified to include consumer goods, manufacturing, furniture, and software sectors. 

Overall activity is expected to remain steady throughout the year as tenant space options in Nashville become more limited and occupancy rates increase across the market.

  • Total industrial inventory: 242,731,968 SF
  • Overall asking rent: $7.84/SF per year
  • Total vacancy: 3.5%
  • Net Absorption: 1,277,309 SF in Q1 2023
  • Leasing activity: 1,673,309 SF in the current quarter
  • Key lease transactions by tenant: Geodis 633,410 SF, Averitt Express 290,860 SF, Wal-Mart 231,416 SF
  • Under construction: 10,895,135 SF with year-to-date completions of 2,537,352 SF
  • Largest industrial submarkets: Southeast, Industrial CBD, East, North

Discover Nashville industrial space for rent.

Nashville Office Market

The office market in Nashville is experiencing strong leasing activity and interest, with sublease availability driving peak vacancy numbers. Direct vacancy rose slightly at the end of the first quarter, while sublease vacancy also increased marginally. 

Despite the growing availability, Nashville’s office asking rents remained stable year-over-year. High-end or trophy properties have seen consistent rent growth, which can be attributed to tenants placing more emphasis on building amenities. Interestingly, tenants are not only paying more per square foot for their space, but they are also adapting their perspectives on space needs and occupancy costs. 

Here are the most recent Nashville office trends reported by Cushman & Wakefield:

  • Total office inventory: 47,181,148 SF
  • Average asking rent (all classes): $32.58/SF per year, full service gross with trophy rents reaching new highs of $49.54/SF.
  • Vacancy rate: 18.9% overall
  • Absorption: -73,098 SF (Q1 2023)
  • Key leases by tenant: Oracle 68,240 SF, Primeritus Financial Services 41,219 SF, Bohan Agency 36,842 SF
  • New construction: 3,240,683 SF (Q1 2023) with no new deliveries projected for 2023
  • Investment sales trends: Sales price of $557/SF is at all-time highs while transaction volume is at historic lows.
  • Largest office submarkets: Central Business District, Cool Springs, Brentwood, Midtown

Discover Nashville office space for lease. 

Nashville Retail Market

Nashville’s retail market is thriving, according to Avison Young, driven by a large millennial population and a booming tourism industry that continues to fuel demand and development. Vacancy in the market remains among the lowest in the nation, showcasing the city’s strong retail sector.

The rapid increase in multifamily and office construction in urban submarkets has led to substantial growth in retail activity. Simultaneously, suburban communities are incorporating a robust retail presence within their mixed-use developments. Nashville’s retail market presents an exciting landscape for commercial real estate practitioners, with promising prospects in both urban and suburban areas.

  • Total retail inventory: 120,592,582 SF
  • Overall asking rent: $26.81/SF per year, increasing by 7% over the past 12 months (Cushman & Wakefield)
  • Direct vacancy rate: 3.3% 
  • Absorption: 234,871 SF
  • Deliveries and development: 191,473 SF delivered in Q1 2023 with 1,285,702 SF under construction
  • Retail market by subtype: General retail 71.3 million SF, Shopping center 32.3 million SF, Mall 8.8 million SF, Power center 7.0 million SF, Specialty center 1.3 million SF
  • Largest retail submarkets: Murfreesboro, Cool Springs/Franklin, Downtown/Midtown/Hillsboro Village, Rivergate

Discover Nashville retail space for lease.

Nashville Multifamily Market

Multifamily in Nashville is looking at a bright future, with new developments fueling growth and attracting more people to the city. RE Business Online reports major projects like the East Bank neighborhood development, driven by Oracle’s significant investment in a sprawling campus along the Cumberland River, promise to bring thousands of jobs to the area. 

Additionally, the city’s proposed multi-billion-dollar investment in replacing Nissan Stadium, home of the NFL’s Tennessee Titans, includes plans for an enclosed stadium and surrounding large retail and residential development. 

These developments are drawing more jobs and people to Nashville, justifying the ongoing growth in housing construction. The metro is expected to add thousands of jobs in the coming years, with the region’s job growth outpacing national figures. Research from Colliers reports the most recent trends:

  • Number of households: 794,373
  • Renter-occupied households: 41% (Zumper)
  • Occupancy rate: 94.5%
  • Effective rent per unit: $1,637
  • Rent growth: 4.6% year over year
  • Absorption: 4,415 units with 10,016 under construction
  • Recent sales by property: Abberly Riverwalk $106.6 million, Richland Falls $59.3 million, Hunters Creek Apartment Homes $41.4 million
  • Top submarkets by deliveries: Central Nashville, Hermitage/Mount Juliet/Lebanon, Franklin/Brentwood

Discover Nashville multifamily property for sale.


Get more in-depth Nashville market data with Crexi Intelligence.

Similar Articles

Shanti Ryle
Shanti Ryle

Content Marketing Manager

Shanti leads Crexi's content marketing strategies with 7+ years of content development experience, creating everything from blog posts to award-winning podcasts. Previously, she worked on content teams at Snapchat, Weedmaps, and HopSkipDrive as well as developed copy, articles, and media for freelance publications.

Share This Article