Nashville reached a milestone in 2017, overtaking Memphis as the largest city in Tennessee. Nashville’s continued population surge has meant good things to the city’s industrial market.
Avison Young, in its second-quarter report, said that developers added more than 1.5 million square feet of new industrial product to the Nashville market during the second quarter. An impressive 83 percent of this space was pre-leased.
This high level of activity is far from a new trend. New industrial deliveries in the Nashville market have totaled more than 8.4 million square feet for the past three-and-a-half years, according to Avison Young.
In the second quarter of this year, Panattoni and Clarion Partners delivered four new industrial building’s to the city’s Southeast submarket. These buildings totaled more than 1 million square feet in the CenterPointe Distribution Park.
Avison Young reported, too, that another 3.8 million square feet of new industrial construction is underway in the Nashville market. Only 40 percent this space is build-to-suit, with the remainder speculaitve.
Because several large industrial tenants moved out of older facilities, net absorption in the Nashville industrial market slowed a bit during the second quarter. Still, Avison Young reports that the Nashville industrial market has absorbed 259,419 square feet year-to-date. The city’s Southeast market saw the most tenant movement, resulting in more than 330,000 square feet of positive absorption.
One of the more notable industrial leases signed during the quarter in this submarket was a sublease to Goggin Warehousing LLC for 244,000 square feet at 328 Weakley Lane.
Vacancy increased slightly during the second quarter, rising 60 basis points to 4.3 percent. Warehouse/distribution vacancies rose to 4.4 percent, while flex vacancies increased to 3.8 percent. The reason for the increases? New deliveries outpaced absorption.