Nashville Office Rents Defy National Slowdown

Nashville office rents are on the rise, particularly in Class A buildings.

Average asking rents hit nearly $60 per square foot for Nashville’s most in-demand spaces in the third quarter, a 5 percent increase over last year, the Nashville Business Journal reported, citing Avison Young. The city’s average asking rent stands at $36.57 per square foot, outpacing major Southern cities like Dallas ($35.07), Charlotte ($34.12), and Atlanta ($32.35).

“If they’re going to come to Nashville, they’re going to be prepared to pay the dollars,” said Caroline Cassity-Cox of Avison Young.

Out-of-state tenants from markets like New York and California view Nashville’s pricing as a relative bargain, but local tenants may be feeling “sticker shock” at these higher rates, said the firm’s Brennan Forster.

The city’s landlords are unlikely to budge on rent prices anytime soon, citing steady demand for quality office space, she said.

“Because of the growth across our market, that Class B space is where we might see a little bit of softening,” she said. “But those landlords are upgrading to keep pace with tenant demands.”

Interest rates and the presidential election will bring more clarity to Nashville’s office market, but rents are expected to continue climbing.

The overall office market continues to grapple with high vacancy rates and the impact of remote work trends, leading to a complex landscape for office rent growth across the country

Leasing activity in Nashville has slowed compared to last year, but demand remains robust, with new-to-market tenants actively seeking over 800,000 square feet of office space. That includes an unnamed financial services firm that is reportedly seeking 500,000 square feet.

Notable leases this year included TikTok’s 58,000 square feet in the Moore Building, at 827 19th Avenue South, more than doubling its footprint in the city.

—Rachel Stone