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State of the Industrial Market

CoStar Market Insights: Nashville has Emerged as an Industrial Leader this Cycle
May 11, 2018
Nashville has experienced unprecedented growth this cycle, being a leader in employment and household growth.

Whether the people are moving the market for the jobs, the music, or the culture, the metro has witnessed household growth of almost 15 percent over the last five years. Out of the top fifty metros across the country, Nashville is number three in this category. With household growth, there comes demand for goods, specifically through e-commerce. And the rise in e-commerce is the best gift the industrial sector could ask for.

Major retail giants have set-up shop here this cycle, taking advantage of the favorable demand drivers in the market. Under Armour is a prime example, moving into the market in 2015. This was the fourth industrial facility in the nation for the firm, following Orlando, Baltimore and Los Angeles.

So why do companies like Under Armour choose Nashville? Strong household growth is very important, as companies want to be able to transport as many goods as possible in the shortest amount of time. Logistics is another key component, an area the market does not fall short in. The metro benefits from access to major interstates that can allow the company to get to large metros such as Atlanta, Charlotte and Chicago within a 500 mile drive. The presence of BNA and CSX are also major factors. Tennessee provides a favorable business climate to future employers including no income tax, right to work and affordability.

All of the reasons above help explain why the industrial sector of Nashville has performed so well this cycle. Currently, Nashville is number one for asking rent growth, averaging over 10 percent in the second quarter of 2018. And unlike other property types, growth isn’t slowing down. With the trend in e-commerce and strong growth in the forecast, the industrial market shouldn’t slow down anytime soon.

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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