Since the pandemic, flight to quality has been a defining trend in the national office market. Now, that trend is on steroids in Nashville. In total, the market's leasing volume reached one million square feet in the first quarter, with Class A properties representing the majority of deals by property type, a new Avison Young report finds.
Particularly, Class A leasing skyrocketed by 125 percent, as tenants were attracted to higher-quality space.
In terms of availability, Class A+ assets enjoyed the biggest decline year-over-year (17.4 percent), followed by trophy (4.9 percent). Class B assets showed the smallest declines (two percent), even less than Class C's (3.6 percent). However, Avison Young noted that this is a trend that can shift in the future.
"We're seeing flight to quality remain the dominant theme, driving a significant uptick in Class A leasing activity," Brennan Forster, senior insight analyst at Avison Young, said.
"As availability tightens at the top of the market, that demand is likely to cascade into Class B properties, creating a trickle-down effect that supports leasing velocity across the broader market."
Overall availability dropped by 220 basis points to 23.2 percent, which marked the fourth straight quarter that the rate witnessed a drop. Additionally, Nashville's office rent growth was resilient, coming in at about 5.3 percent higher to $39.34 per square foot FS.
Oracle had the largest lease in the first quarter, taking 116,065 square feet at Neuhoff Tower. The next two biggest deals were the State of TN and 360 Privacy, signing for 32,208 and 31,463 square feet, respectively.
While Avison Young noted that tenant demand could shift more evenly to lower quality product, the firm expects the strong activity to continue through the rest of the year.
"Continued interest from both existing tenants and new-to-market entrants is expected to sustain leasing momentum and tighten availability further throughout 2026," Avison Young said.
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