Nashville’s office market recorded more than 360,000 sf of leasing activity in Q2 2023. Flight-to-quality trends continued with 59.0% of deals occurring in Class A office product.
New speculative deliveries caused overall gross asking rates to rise to $34.09 psf, a 3.0% increase from this time last year.
Nashville’s vacancy rate improved in Q2, falling 30 bps from last quarter to 18.6%. The delivery of vacant construction projects and new sublease space still hold vacancy above 10-year highs.
Overall net absorption recorded at 691,470 sf in Q2 2023, resulting in total occupancy gains of 764,768 sf YTD. The increase is heavily attributed to the completion of Amazon’s second tower, measuring 588,000 sf in total.
New City delivered Neuhoff in Q2, combining with the Amazon tower to bring YTD completions in Nashville to more than 1.2 msf. The first of its kind in Nashville, the 385,000-sf building offers both 100,000 sf of rehabilitated office space and 280,000 sf of Class A creative office space.