Office vacancy rates in Nashville reversed a three-quarter trend by falling 42 basis points in the third quarter, according to the latest research by JLL.
That piece of good news was just one of the many contained in JLL’s third-quarter Nashville office report. According to the report, not only did vacancies fall, office rents continued to rise, growing 1.1 percent during the quarter from $25.48 a square foot to $25.77 a square foot.
Nashville’s office vacancy rate fell to 8.2 percent in the quarter. For the year so far, the Nashville office market saw 537,401 square feet of net absorption. The third quarter remained a busy one for developers, as they delivered more than 1 million square feet of new office product to the Nashville market.
What is fueling Nashville’s office market growth? JLL researchers pointed to the city’s booming toursit economy and business-friendly local government. At the same time, efforts to increase the density level of Nashville’s urban core have succeeded, creating greater demand for office space in the city’s downtown.
JLL reported that downtown office vacancy rates are now at their lowest level in 15 years. Vacancy rates in the urban core are 110 basis points lower than they are in the suburbs.
The Nashville office market should only get busier. JLL reported several notable buildings now under construction, including Capitol View Building E in downtown, which will bring 294,650 new square feet of office space. The Capitol View LifeWay HQ building will bring 250,000 new office square feet. The Mallory Green Project, first phase, will bring 175,000 square feet of speculative office space in the Cool Springs submarket. Also in Cool Springs, the Berry Farms-Lampo project will add 150,000 square feet of office space.
