ECONOMY
The third quarter 2019 saw Nashville continuing to outperform National averages. With job growth y/y at about 3% in Nashville, the National average sits at closer to 1%.
Unemployment continues to trend downward, with Nashville again outperforming the National average at close to 2% and 4% respectively.
Unsurprisingly, Nashville’s population growth also continues to beat out the National numbers. While not as high as recent years, Nashville still welcomes about 80-85 new people a day.
The two major age groups most contributing to this population growth range from 20-34 years of age, over 10% growth, and 65+ years of age, over 20% growth.
NASHVILLE RETAIL MARKET
From quarter two to quarter three of 2019, retail vacancies have remained the same at a low 3%. Nashville’s vacancy rates are holding at a near record low. With the rise of e-commerce and online shopping posing a threat to brick and mortar shops, the Nashville market remains tight in retail availability.
Annual rent growth, while still strong, has dipped from the previous quarter. Rent growth by the end of 2019 is projected to hit 2.9%. While rent growth is slowing, trends show rent growth in the Urban Core, Rutherford County, and Williamson County remain strong and well within market averages. Nashville leads peer Metropolitans such as Denver, Charlotte, and Atlanta in cumulative growth.
During Q3, construction in the Nashville retail market remains elevated and competitive. Over one million square feet of retail space is currently under construction in the Greater Nashville Area. 8% of all retail buildings and spaces in Nashville were built after 2010, proving new construction buildings are a highly desired product.
Some of Nashville’s largest retail projects under construction remain in the Urban Core with Fifth & Broadway at 200,000 square feet and The Derby at 60,000 square feet.
Fifth & Broadway
This construction trend is rapidly spreading throughout the suburban markets. Developments like Brookhaven Place in Murfreesboro and Harpeth Square in Franklin both have a majority of their retail space pre-leased.
Harpeth Square
Investments in the retail market remain strong with booming sales volumes. Retail cap rates continue to compress, proving the Nashville retail market is highly desirable for investors.
*All data courtesy of CoStar
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