Tenant demand has been resilient, as of late, in Nashville's office sector. That's highlighted by the fact that the 1.1 million in signed leases during the second quarter was the highest level seen since the third quarter of 2019, according to a market report from Savills. Additionally, the activity marked a 150 percent increase from the previous three months. The five-year quarterly average sits just under 600,000 square feet.
Holland & Knight owned the top lease, thanks to its relocation for 141,447 square feet in the Downtown submarket. Sentry Insurance Company and Vanderbilt University Medical Center took second and third place, with their 104,070-square-foot and 101,345-square-foot deals. Rounding out the top five were Amazon and BlueCross BlueShield, taking 98,100 and 81,221 square feet, respectively, in the market.
Moreover, the performance was strong across the board for office in Nashville. For one, availability slipped to 22.5 percent, representing a decline of 130 basis points. Savills said this was "due to strong leasing activity and strong tenant demand." However, the category is up from the 20.6 percent recorded in the 12 months prior.
Additionally, rent rates grew at a rapid pace thanks to fight to quality playing a role, according to Savills. Prices surged by 7.2 percent year-over-year to an average of $36.86 per square feet. Class A properties averaged $40.25 per square foot.
Inventory increased to 53.1 million square feet compared with 49.3 million square feet in the second quarter of 2024. It's unclear if construction or deliveries were up, however.
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