Nashville is the capital of Tennessee and home to over two million residents. Dubbed the “Music City,” Nashville sees an average of 16.1 million visitors annually for its rich culture and unique nightlife. Nashville’s retail sector is performing strongly, achieving record-breaking sales volume in 2021, low vacancies, and incredible year-over-year rent growth. Vigorous leasing activity and net absorption have helped the market achieve these accolades. The market has benefitted from impressive population and job growth, a recovering economy, and an influx of return of travelers.
The retail segment is thriving in Nashville, with year-over-year rent growth of 10.6 percent, well above the national average of 4.1 percent. Income and population growth have fed into the substantial rent gains and may continue on this trajectory with high-paying office jobs from Amazon and Oracle entering the market. The highest rents are found in the suburban submarkets, such as Cool Springs and Brentwood.
Construction has been minimal the last few years, with only 1.3 million square feet underway. It is a decade-low for Nashville, representing only 1.1 percent of current inventory. Developers are focusing on ground-floor retail additions to office or apartment buildings. Downtown Nashville is the most active submarket in terms of development as population growth is primarily concentrated in the area.