Page 16 - 1400 18th Ave

16 | Cassidy Turley
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
-250,000
0
250,000
500,000
750,000
1,000,000
1,250,000
1,500,000
Construction, Absorption & Vacancy
Construction Absorption Vacancy
Market Overview
Nashville MSA Office Market Overview
For most office markets around the country, commercial
real estate leasing has been in a holding pattern that
is beginning to recover. The timing and strength of the
recovery is dependent on a number of factors: consumer
confidence, increased employment, capital constraints,
and commercial and consumer expenditures. Nashville’s
office market only saw a small bump in the road from
2008-2009, and has been moving forward ever since.
The diversification of industries has provided insulation
to adverse changes in the economy, and has been the
key to strong leasing and absorption. Direct vacancy for
the office market is 8.7%, down from 14.4% in 2009.
After small negative net absorption in 2009, absorption
has been positive since. Both 2010 and 2011 had
absorption figures well above 500,000 SF, and 2012
reported a positive number just
over 1.0 MSF.
First quarter 2013 posted positive 146,394 SF – a
relatively flat number considering the recent historical
absorption figures. The reason for this low figure is
simply that there is very little space to absorb and little
speculative construction under way. Large users such
as Tractor Supply, Amsurg and LifePoint Hospitals are
building new headquarters within the MSA and will
add to the vacancy rate when they move. Landlords
are diligently pre-marketing their existing space with
hopes of leasing the space before it hits the vacancy
and absorption figures in early 2014. Interest in
Nashville remains high, and new relocations are always
a possibility. With strong tenant demand and lack of
quality “large blocks” of space, the pressure has shifted
to the developers to add speculative space, with an
emphasis on LEED certification and higher end Class A
product both inside the city and in the suburbs.
t i , rption, and Vacancy