Nashville, TN Retail Market Report
As a result of above-average economic and population growth throughout Nashville, the retail sector has recently experienced notable improvements. Although the retail industry in Nashville initially suffered from the impact of the COVID-19 pandemic, the rate of store closures has significantly slowed down. Moreover, while leasing activity hasn’t fully recovered to pre-pandemic levels, it has been sufficient to achieve positive net absorption in recent quarters.
Over the last 12 months, retail rental rates have surged, registering as one of the fastest growth rates in the nation, with an impressive annual increase of 6.5%.
For seven out of the last eight quarters, net absorption has surpassed 200,000 square feet, a level not seen in Nashville since 2014 and 2015. As a result, the market’s vacancy rate of 3.3% is approaching the lowest point recorded in the past 15 years. Retail rents have seen significant growth in the last year, with an annual increase of 6.5%. Retail construction has been limited in recent years, with only around 1.4 million square feet of retail space in progress across the market, representing approximately 1.2% of the existing retail stock. Nashville is an attractive market for retail investors, but the ever-changing lending environment has slowed down transactional activity. Currently, the 12-month sales volume is $829 million.
Nashville by the Numbers Last 12 Months
- Vacancy Rate: 3.3%
- Rent Growth: 6.5%
- Deliveries SF: 568K
- Sales Volume: $829M
- Cap Rate: 6.1%