Nashville remains one of the fastest-growing cities in the United States. That has fueled an industrial building boom, with Avison Young reporting that 2.4 million square feet of industrial space was added to the Nashville market in the second quarter of 2019.
And since 2015? The Nashville market has seen the addition of a total of 17.1 million square feet of industrial space.
That is just some of the big news from Avison Young’s second quarter Nashville industrial report. Officials with Avison Young say that the industrial surge in this city is showing no signs of slowing.
“Nashville’s construction boom is providing relief for tenants looking for modern industrial space,” Sue Earnest, principal in Avison Young’s Nashville office, said in a statement. “The Southeast and Wilson County submarkets are expanding significantly to keep up with demand from new and growing end-users, whether in the form of speculative or build-to-suit product.”
The second quarter saw the delivery of several large industrial projects, including Building 1 in Panattoni’s master-planned Speedway Industrial Park in Wilson County. The 689,000-square-foot speculative industrial warehouse was completed vacant. A lease, though, has been signed by Geodis. Because of this, the building will be expanded to accommodate almost 1.1 million square feet.
More than 1.8 million square feet of industrial construction is underway in the Nashville market, with only 27 percent of this space pre-leased. The bulk of the construction is occurring in the Southeast and Wilson County submarkets, which had 1.5 million square feet and 2.4 million square feet of completions in the first half of 2019.
One of the bigger industrial deals in the Nashville market in the second quarter came courtesy of Rooms to Go. The furniture retailer purchased the 900,000-square-foot building known as the Cedar Farms development. Rooms to Go will use this building as a warehouse, reserving 5 percent of the space as a retail outlet open to the public. Rooms to Go plans to employ about 240 people here.
The overall industrial vacancy rate in the market stood at 5.3 percent during the second quarter. The vacancy rate for flex space was a low 2.1 percent. Investment sales in the Nashville industrial market totaled $91 million during the second quarter, bringing the year-to-date volume to $174 million.
The biggest transaction of the quarter was the sale of the former Goodwill Industries Germantown campus from TPA Group to New City, LLC for $26.25 million. The buyer plans to redevelop the site into a mixed-use development including office, retail, multifamily and hotel space.
