Q3 2021 Industrial Market Report

The third quarter Nashville Industrial market continues to remain red hot. Overall absorption was below the second quarter, with over 1.5 MSF. Vacancy rate dropped to 3.4 down 10 basis points, still extremely tight for the market. Rental rates continue to increase with high demand and limited supply coming to market. Demand for E-Commerce warehouse space and the need to keep extra supplies on hand due to supply chain disruptions are causing users to reevaluate their space needs. Many tenants are choosing to expand and take down additional space.

Wilson County has led the way with 5.6 MSF of absorption year to date, followed by the Southeast submarket with 1.1 MSF of absorption. These two submarkets account for nearly 85% of new construction; Wilson County with 3.6 MSF and the Southeast with 1.8 MSF. The West submarket is the tightest, with almost no vacancy. As rents continue to rise and sites in primary submarkets continue to be absorbed, we are seeing developers look at secondary submarkets for new opportunities.

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