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Could 2018 Be a Record-Breaking Year for Nashville Office Sales Volume?

CoStar Market Insights: Volume Over First Three Quarters of 2018 has Positioned Nashville for Another Big Year
September 28, 2018
The 530,000-square-foot Capitol View Tower in Nashville.

Investors from all over the country are flooding into Nashville, paying record-breaking prices for office assets. Nashville has experienced some of the best job growth in the country this cycle and is number two behind Austin for office-using employment growth.

As the nation is seeing a significant drop in office sales volume, Nashville is doing just the opposite. More than $760 million has traded hands over the first three quarters of 2018, surpassing any other year’s three-quarter volume. The only year that comes close to this total is 2016, currently the peak year for investment activity, with $710 million in sales over the first three quarters.

The downtown market continues to enjoy strong investor appetite, taking up one-third of the metropolitan area’s sales in 2018. This submarket has out-performed the metropolitan average and continues to draw new companies to transplant here.

Some examples of recent moves include HCA subsidiaries (Sarah Cannon Research Institute, HealthTrust and Parallon Business Solutions), Bridgestone and AllianceBernstein. Downtown is also experiencing some of the highest rent growth in Nashville, and forecasts are showing above-average growth compared to other major submarkets in the area.

These reasons are just a few of why investors want to place capital here. The second-largest sale in downtown’s history closed here in September, when the Agnew Company paid $140 million, or about $354 per square foot, for One Nashville Place.

Companies continue to be bullish on the Music City, with several properties under contract. If this trend continues into the fourth quarter, Nashville could most definitely see another record-breaking year for total volume and pricing per unit.

CoStar Market Insights provides a snapshot of recent real estate trends. The CoStar Market Analytics team monitors commercial and multifamily real estate across 390 metro areas, with a granular understanding of the projects, players and economic trends that move these markets.

Learn how CoStar Market Analytics can add to your market knowledge, helping to minimize risk and maximize returns.

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