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Class A Rental Rate Growth
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1Q13
Class A Rental Rate Growth
Green Hills / Music Row Overall
Green Hills - Music Row Submarket
The Green Hills - Music Row submarket of Nashville,
where the 1400 18th 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.
Market Overview