Nashville Industrial Highlights

• The Southeast, Wilson County, and North submarkets made up the most leases for the Nashville industrial sector in the first quarter, with the largest lease of 645,546 square feet in the Southeast submarket.
• Building D3, part of the Airpark Commerce Center in the Southeast submarket, was the largest sale in Q1 2025, selling for $55.8 million as part of a 37-property portfolio that sold for $685 million.
• Oracle, a software company, is relocating to Nashville and will add 8,500 employees to the market upon its final move in 2031.

 

By the Numbers

• Sales Volume: $359.5M
• Average Sale Price Per SF: $115
• Rent Growth: 5.6%
• Vacancy Rate: 7.7%
• SF Absorbed: 3.9M
• SF Under Construction: 6.7M
  Source: CoStar Group

 

Rents

Despite steady rent growth in the prior three years, it has begun to slow down. Annual asking rent growth declined to 5.6%, but this is still greater than the national average. Across the market, rents range around $11.70 per square foot, with flex properties recording the greatest rents at $18.93. Additionally, the lack of land availability has affected some parts of the metro and increased rent. This activity occurred in Southwest Nashville, which records average asking rents at around $16.00 per square foot. As construction slows down, rent growth is expected to increase throughout the rest of 2025.

 

Nashville Industrial Vacancy

A decrease in construction has helped bring Nashville’s vacancy rate down to 5.2%, below the national rate. Consistent absorption levels throughout the past three years have also allowed the metro to record a stable vacancy level. Properties over 100,000 square feet have taken over leasing activity in Nashville. During Q1 2025, six leases were signed for these larger properties. Meanwhile, properties under 50,000 square feet record availability of around 4%, with small-bay availability the lowest in the Southwest submarket.

 

Construction

Nashville added over 8 million square feet from 2021 to 2023, but is now recording a slowdown in deliveries. This decrease began in 2024 due to increased construction costs, and is expected to continue throughout 2025. Most new developments were delivered in the Wilson and Rutherford County submarkets, with more than 80% of industrial construction delivered since 2020 located in these areas. With the current under construction level of 6.7 million square feet, 30% of the space has already been pre-leased. The North submarket leads in pre-leasing activity, with 1,549 square feet already signed.

 

Sales

While Nashville sales recorded a slowdown in activity, the second and third quarters of 2024 recorded the greatest sales volume over the past two years. The increase in sales can be attributed to e-commerce activity and Nashville’s accessible location to other metros across the country. After the rise in transactions, the price for square foot reached $125 in 2024. Since then, it has dropped to $115 per square foot in Q1 2025.