Nashville’s retail market posted mixed leasing results in Q3 2025, with net absorption falling by 241,000 SF, marking a rare pullback after several years of strong demand. The decline nudged vacancy up to 3.6%, though availability remains well below the historical average of 4.4%. Despite weaker absorption, asking rents climbed 4.5% year-over-year, reaching an average of $29.62/SF, supported by limited construction. Prime submarkets, such as Vanderbilt–West End and Cool Springs/Franklin, continue to command above-average rents, while neighborhood and suburban centers saw healthy leasing interest. Overall, Nashville’s constrained supply and expanding consumer base are helping landlords maintain pricing power, ensuring the market remains resilient even as leasing momentum temporarily softens across the metro.

 

Key Findings

• Sales activity remained modest in Q3, with private buyers dominating transactions. Smaller deals prevailed, though headline trades like Jack’s Bar-B-Que Broadway sale highlighted investor appetite.
• Cap rates were stable below 6.5%, with examples such as ExchangeRight’s $9.5M Sprouts purchase at a 6.3% cap rate reflecting demand for grocery-anchored, single-tenant assets.
• Average pricing reached $360/SF, up 38% in five years, while record-breaking trades underscored strong investor competition for premier urban retail and grocery properties in core locations.

 

Nashville Retail Supply & Demand Dynamics

Source: CoStar Group, Inc.

 

 Nashville Demographics

Source: CoStar Group, Inc.

• Unemployment Rate: 2.9%
• Current Population:2,176,310
• Households: 896,289
• Median Household Income: $88,539

 

Nashville’s economy is being fueled by rapid population growth, with the metro area surpassing 2.1 million residents after adding 136,000 people since 2020. International migration now accounts for nearly 40% of new residents, bolstering the city’s labor pool and making it an attractive hub for major employers. Companies such as Amazon, TikTok, and Oracle are investing heavily, drawn by Nashville’s low costs, strong healthcare sector, and growing base of educated workers. Key industries including healthcare, manufacturing, and technology are expanding, while corporate relocations continue to strengthen the city’s role as a logistical and economic powerhouse.

 

Population, Labor, & Income Growth

Source: CoStar Group, Inc.

 

Nashville Retail Construction

In Q3 2025, Nashville’s retail construction pipeline remained subdued as high land, labor, and financing costs kept new groundbreakings limited. Despite more than 400,000 SF in construction starts earlier in the year, activity slowed this quarter, highlighting persistent development headwinds. Developers continue to favor mixed-use projects, particularly in the downtown core, where population growth supports ground-floor retail in multifamily and office buildings. Plans tied to the Titans’ new stadium and Oracle’s East Bank headquarters remain in progress. In addition, smaller suburban projects and QSR chains, such as Dutch Bros and Whataburger, account for much of the quarter’s activity.

 

SF Construction Starts

Source: CoStar Group, Inc.

 

SF Under Construction

Source: CoStar Group, Inc.

 

Nashville Retail Sales

Nashville’s retail investment activity in Q3 2025 was defined by smaller private transactions but featured notable headline deals. A standout deal was the $15 million purchase of Jack’s Bar-B-Que on Broadway, trading at a record-breaking $4,200/SF, underscoring investor appetite for trophy urban assets. Another significant sale involved a freestanding Sprouts in Brentwood, acquired by ExchangeRight for $9.5 million at a 6.3% cap rate and $411/SF. Most other deals fell within the $1–$3 million range, often single-tenant triple-net assets, with pricing between $200–$500/SF. Overall, Q3 activity reinforced Nashville’s trend of private buyers driving volume, while cap rates held steady below 6.5%.

 

Nashville Retail Sales Volume

Source: CoStar Group, Inc.

 

By the Numbers

Source: CoStar Group, Inc.

• Sales Volume: $224M
• Price Per SF: $283
• Cap Rate: 6.3%
• Vacancy Rate: 3.6%
• Rent Growth: 4.5%
• Asking Rent Per SF: $29.62
• Under Construction: 1.1M SF
• Delivered: 136K SF
• Absorbed: (241)K SF