1400 18th Ave

Market Overview

Green Hills - Music Row Submarket The Green Hills - Music Row submarket of Nashville, where the 1400 18 th Avenue South Building is located, has been one of the strongest submarkets in the city over the past several decades. While somewhat smaller than most of the submarkets, it commands the highest rents in the MSA. In fact, as of the most recent quarter, Class A asking rents have exceeded $30.00 PSF for the first time. Music related industries and Vanderbilt or Belmont Universities are the leading occupiers of space. Complementing the strength of the office market is the tremendous growth of high-end single family and multi- family residences. Single family residential pricing has surpassed $200 PSF in the area, with builders frequently tearing down older homes as no suitable land exists. The multi-family component has close to 3,000 units in vary- ing stages of construction in the immediate area. All of this residential activity bodes well for office product in the submarket.

The continued growth of Belmont and Vanderbilt Univer- sities has also been a large driver for office demand in recent years. Vanderbilt has expanded their residential campus, one of which sits directly across the street from the subject property, and their Medical Center. Belmont has added, among other facilities, new law and pharmacy schools. The Green Hills – Music Row submarket consists of ap- proximately 1,928,000 SF (626,470 of which is consid- ered Class A). The current vacancy rate overall is 8.1% and 3.4% for Class A space, down considerably from their peak in 2009 of 12.3% overall and 8.1% for Class A. Due to the limited construction in the area, absorption has been relatively light. It should be noted the submarket has not experienced a year of negative absorption in over 10 years.

Class A Rental Rate Growth Class A Rental Rate Growth

30.0%

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%

-5.0%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1Q13

Green Hills / Music Row Overall

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