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Market Report

Nashville Office Investment Forecast

2020 Outlook

Speculative Construction Exceeds Rising Demand; Investors Focus on Value-Add Deals Downtown

Supply gains temporarily lift vacancy. Robust company expansion and relocation continue to Nashville this year as the market’s skilled workforce continues to grow. In 2020, Alliance Bernstein will move from its current location in New York City into a 200,000-square-foot space at the Fifth and Broadway development in the central business district. Additionally, Amazon is moving into a 750,000-square-foot space in the spring of 2021 at Nashville Yards. Collectively, the firms will bring approximately 6,000 jobs to the area, advancing the future growth of the metro’s economy and drawing additional employers to the metro. As prominent business service industries such as these promote the viability of Nashville, an increase in speculative construction is taking place to meet future demand. For the second consecutive year, development surpasses 2 million square feet. The large influx of space will ultimately lead to a temporary rise in the metro’s average vacancy rate to the mid-11 percent area, although the rate of increase will slow relative to 2019.  

 

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