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Multifamily Rent Growth in Nashville by Submarket

CoStar Market Insights: Suburbs Seeing Strongest Rent Growth and Downtown Continues to Feel the Pain
September 7, 2018

The Edison at Peytona apartment complex under construction in Gallatin, Tennessee.

While rent growth in Nashville is still below the national average, it has improved in 2018. Strong net migration and a slowdown in deliveries have fueled rent gains across the metro. While most submarkets have seen improvements recently, some are doing far better than others.

The suburban submarkets continue to outperform the downtown market, mostly because about half of the development in Nashville this cycle has been in this submarket. Maury County is currently leading the market for rent growth, at close to 6 percent. This submarket has one of the lowest vacancies in the market, which is exceptional given that nearly half of the submarket's apartment inventory delivered in the past three years.

General Motors has been a big demand driver for the local economy, fueling demand for new apartments. Another strong submarket is Charlotte, a fast-growing area in Nashville that has increased its footprint by 40 percent this cycle. While this submarket doesn’t include many major employers, many view this neighborhood as one of the trendiest areas in Nashville. Also, rents are about 25 percent lower here compared to the downtown area.

The downtown market continues to feel supply-pressure pains. This submarket has some of the best demand drivers in the metro, with large companies such as HCA and Bridgestone adding thousands of jobs to the area recently. As a result, this submarket has almost tripled inventory this cycle, and the pipeline will be robust in the near term.

Demand has been strong, continuing to eclipse record-breaking levels, but unable to catch up with new supply since 2014. While there has been some volatility, rent growth has been negative since the beginning of 2017, along with elevated concessions. Many submarkets across Nashville have aggressive construction pipelines which could hurt rent growth in the near term.

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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