Flight-to-Quality trend continues in Nashville Office Market
- Nashville's office absorption rebounded in Q3 at 157,770 square feet, bringing the YTD absorption to 7,000 square feet
- Market vacancy decreased slightly this quarter, an improvement over the previous year
- Average rental rates continue to increase across the market, as tenants flock to quality space
Nashville’s office market experienced improvement in the third quarter compared to the first half of 2022. The market absorbed 157,770 square feet in Q3, rental rates continue to hit new records, and leasing volume increased by 25%. Newly-delivered Class A amenity-rich space has become a magnet for tenants, as many of the new projects — existing and under construction — are over 50% leased. This flight-to-quality follows the national emerging trend that is fueled by employers wanting to attract new talent and retain employees. On the other hand, newly marketed sublease space came online in Q3, which offset the vacancy. This will be an important factor to continue monitoring over the next few quarters, as tenants continue to evaluate their space needs.