Nashville, TN Economic Overview
Nashville, TN, is the bustling capital and largest city of Tennessee and a well-known center of the country music industry. The city is located on the Cumberland river, just north of the state’s geographical center and is home to more than 1.8 million people and more than 40,000 businesses. The Mid Cumberland region is defined by its diverse economy, low costs of living and doing business, and vibrant culture, with major economic input from tourism, health care and education. “Music City” attracts tourists from all over the world with numerous music festivals and events throughout the year, making Nashville commercial real estate a prized one in the country.
As the “home of country music,” Nashville’s economy is most famously distinguished by its major music recording and production centers—most of which are located in the Music Row area. Although it is world renowned as a music recording center and tourist destination, its largest industry is health care—home to more than 300 health care companies, including the Hospital Corporation of America (HCA). The automotive sector is growing increasingly important to the Middle Tennessee region, as well as insurance, finance, and publishing. Increasing foreign direct investment and exports keep the Nashville region on a leading edge of international business.
Nashville, TN Commercial Real Estate Market
The Nashville commercial real estate scene includes one of America’s tightest office markets, displaying high demand for space in the region driven by technology and healthcare sectors. Increased market interest and declining vacancy rates since 2010 are driving rental rates to record highs. Nashville offers over 35 million square feet of office space with 2.4 million square feet currently under construction. Strong overall business growth has helped boost office demand in the metropolitan area with the technology sector capturing the largest share of leasing volume and the financial sector taking the second-largest share in 2017.
The Downtown Nashville office market includes spaces in its Central Business District (CBD), Midtown, and Metro-Center and features a diverse assortment of entertainment, dining, cultural, and architectural attractions. Three major interstate highways converge near the core area, with many regional cities just a day’s driving distance away. Together, downtown Nashville offers over 13 million square feet in office space, with most space concentrated in its CBD, in a highly sought after and culturally vibrant part of the city.
North/East Nashville is a mixed area north and east of downtown Nashville. East Nashville lies across the Cumberland River, with mixed-use areas of businesses and residential. East Nashville is an area of creative and artistic flair with a trendy progressive atmosphere. There are many coffee shops and art galleries in the interwoven streets, which also play host to many popular festivals and fairs throughout the year. The North Nashville office market is the most limited, offering just 419,000 square feet of office space.
Green Hills/West Nashville is home to three area universities—Vanderbilt, Belmont, and Lipscomb Universities—and The Mall at Green Hills, a high-end enclosed shopping center which began as “strip mall" in the1950s. The Green Hills office market hosts approximately 2 million square feet of office space and the city’s lowest vacancy rate, of 2.9%. Green Hills is one of Nashville’s more affluent areas and is often chosen by residents who don’t want a long commute to downtown businesses. In recent years, many of its larger lots and remaining open spaces have been re-divided to become sites for higher-density developments.
Nashville, TN Office Sales Volume
Data provided by Yardi Matrix, for properties larger than 50K SF, which sold at over $5M.
Nashville, TN Office Transactions
Data provided by Yardi Matrix, for properties larger than 50K SF, which sold at over $5M.
Nashville, TN Commercial Inventory Breakdown
Total: 37,106,840 SF
By square footage range:
- 50k to 100k SF: 5,910,408 SF / 15.93% of total office
- 100k to 500k SF: 22,860,923 SF / 61.61% of total office
- 500k to 1M SF: 7,335,509 SF / 19.77% of total office
- > 1M SF: 1,000,000 SF / 2.69% of total office
- Class A+: 2,981,669 SF / 8.04% of total office
- Class A: 16,483,986 SF / 44.42% of total office
- Class B: 13,531,238 SF / 36.47% of total office
- Class C: 963,869 SF / 2.6% of total office
Total: 4,415,283 SF
By square footage range:
- 100k to 500k SF: 3,176,623 SF / 71.95% of total industrial
- 500k to 1M SF: 1,238,660 SF / 28.05% of total industrial
Employment in Nashville, TN
Employment in the Nashville metropolitan area maintains strong growth and added 7.800 jobs in January and February of 2017. The largest gains in employment reported are in Retail (3,120 jobs), Manufacturing and Construction (1,570), and Professional and Business Services (1,560 jobs) according to Cushman & Wakefield research. The rapidly growing labor force is comprised of the 20 to 44 age cohort as rising incomes and strong job prospects attracts millennials to the region. The area’s unemployment rate of 4.2% is well below the national average.
According to the Bureau of Labor Statistics, the following sectors employ the most people in the region:
- Trade, transport and utilities currently employs 183,300, growing at 2.3%;
- Professional and business services currently employs 159,500, growing at 3.3%;
- Education and health services currently employs 151,400, growing at 4.6%.
Other top-ranking sectors are:
- Government currently employs 120,500, growing at 3.1%;
- Leisure and hospitality currently employs 108,600, growing at 2.6%;
- Manufacturing currently employs 84,200, growing at 3.8%.
Nashville has most notably seen professional and business services employment grow at 47.2% since 2010. Some of this stems from the establishment of branch offices of Silicon Valley companies, as well as the expansion of the area’s strong health care and entertainment industries.
As manufacturing declines in large cities, professional and business services have become a prime generator of high-end jobs. According to Forbes, Nashville offers a promising location for those invested in this type of work as a less-expensive, but large metro area that will continue to grow stronger in the long-term future.
Education in Nashville, TN
Nashville is often labeled as the “Athens of the South" due to its many colleges and universities. These include Vanderbilt University with 12,567 students and Tennessee State University with 10,389 students.
The city is served by the Metropolitan Nashville Public Schools. More than 82,000 students are currently enrolled in the district’s 73 elementary schools, 33 middle schools, 25 high schools, 18 charter schools, and eight specialty schools.
Commuting Time in Nashville, TN
Nashville ranks at the bottom of the South’s metro and micro areas for traffic and drive times. Nashville is centrally located at the crossroads of three Interstate Highways: I-40, I-24, and I-65, which connects it to many well-known and large cities in the region—and the traffic they bring. The average drive time to work for commuters in the Nashville-Davidson-Murfreesboro-Franklin metro area is 26 minutes.
The City’s downtown core can become slightly congested, but has launched several initiatives that help residents get around more easily, whatever their choice of transport:
- A number of arterial surface roads called “pikes" radiate from the city center;
- A newly built hub station downtown provides improved bus transit;
- A bus rapid transit lite system which includes fewer stops and more frequent buses traveling along more popular routes;
- A newly launched passenger commuter rail system called the Music City Star.
- Total Population450,722
- Male Population(48.2 %) 217,299
- Female Population(51.8 %) 233,424
- Median Age33.00
- Average Household Income$83,045
- Median Household Income$51,998
- Median Income Under 25$30,310
- Median Income 25-44$62,418
- Median Income 45-64$52,555
- Median Income Over 65$41,950
- 8th Avenue South Demographics
- Belmont - Hillsboro Demographics
- Berry Hill Demographics
- Caldwell Hall Demographics
- Century City Demographics
- Donelson Demographics
- Downtown Nashville Demographics
- Elliston Place Demographics
- Elm Hill Acres Demographics
- Green Hills Demographics
- Hillsboro Village - Hillsboro West End Demographics
- Larkwood Demographics
- Luna Heights Demographics
- Metro Center Demographics
- Midtown - Vanderbilt University Demographics
- Music Row Demographics
- Nashville International Airport Demographics
- North Capitol - Sulphur Dell - Market District Demographics
- Plus Park Demographics
- Providence Park Demographics
- Radnor Demographics
- Rolling Mill Hill Demographics
- Ruthledge Hill - Lafayette Demographics
- Seven Oaks Demographics
- SoBro Demographics
- The Gulch Demographics
- West End - West End Circle Demographics
- West End Park Demographics
Residential Rents in Nashville, TN
When choosing the best place for a business, location research is very important – not only for the office, but also for the employees’ convenience.
One-third of the Nashville region’s residents are renters—close to the national average of 36%. Nashville has proven to be a hot rental market with Census data showing gross monthly rents, which used to average $872 between 2011 and 2015. In January 2017, the figure has ballooned to $1,401—an increase of more than 60 percent in six years. According to Rent Café, the average rent for an apartment in Nashville is $1,187 compared to $1,100 last year.
Nashville, TN Average Rental Price, June 2019
- $ 1,263/mo
- Studio: $ 1,222
- 1 Bedroom: $ 1,180
- 2 Bedrooms: $ 1,322
Nashville, TN Rent Trends
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