Nashville Investment Rebounds but Development Runs Dry

Nashville’s investment market is showing signs of life again, but the development engine that fueled its boom years is still sputtering.

The metro logged $5.1 billion in real estate investment volume in 2025, a 40 percent jump year-over-year, according to Colliers’ latest market index report. The rebound marks the city’s strongest showing since the post-pandemic slowdown, though it remains well below the $10 billion-plus peak Nashville hit in 2021 and 2022, the Nashville Business Journal reported.

The recovery has been uneven but broad-based, according to the report. Industrial led all real estate classes with about $1.9 billion in deal volume last year, followed by multifamily at $1.4 billion. Offices posted the sharpest growth, with investment volume climbing 75 percent to just under $900 million — though that figure masks a bifurcated market.

Recent trades underscore the divide. Shorenstein Investment Advisors paid $217.8 million for the building at 1222 Demonbreun Street in the Gulch, one of the highest prices ever recorded for a Nashville office building, according to the outlet. At the same time, aging properties like Fifth Third Center and Philips Plaza traded at steep discounts, with buyers eyeing hotel conversions.

Even with distress in older stock, demand for newer buildings is holding up. Roughly three-quarters of space in office buildings constructed over the past six years is leased, including projects still under construction, according to Colliers. Large tenants are also re-entering the market: Oracle signed a 116,000-square-foot lease at the Neuhoff development, while Starbucks is exploring a roughly 250,000-square-foot deal downtown.

That momentum, however, is running into a supply constraint. Nashville has just 300,000 square feet of office space under construction — a fraction of the roughly 2 million square feet typically underway in a given year, according to the publication. Starting new projects remains difficult, with developers requiring sizable preleasing commitments and rents at about $60 per square foot to make deals pencil.

The result is a narrowing window for tenants and investors alike, according to the publication. Availability is tightening, sublease space is shrinking and construction starts remain scarce.

Zooming out, Nashville’s fundamentals are still doing the heavy lifting, as population and employment growth continue to climb and permitting activity is beginning to tick up.

— Eric Weilbacher