According to a new report released by Colliers International, the industrial real estate market in Nashville has been on the upsurge for three consecutive quarters. While average rents in the area have shown a minuscule increase, the number of vacancies has declined.
The report goes on to state that the Nashville region has registered a net increase of 302,959 square feet of industrial lease space. This number is the highest in recent times and represents the highest quarterly increase in absorption in 2012. Thus far in 2012, the entire market has registered a net absorption of 511,431 square feet of space meant for industrial purposes.
The report continues, “With a high increase in the Y-o-Y absorption and with over 2.3M square feet of industrial space under construction, the market in this year is way ahead of the way it was in preceding years”.
Colliers credit three major deals as triggers for increased activity: Nissan Americas’ 350,000 square foot lease in Southeast submarket, ProPark Inc.’s 100,000 square foot lease in North submarket and TwinMed’s 95,000 square foot deal in Southeast submarket.
With increased action expected in the fourth quarter, the average asking rental rates have seen an increase, albeit a small one. The most expensive rental areas are in the Southwest submarket at $4.77/ square foot and IBD at $4.03/square foot. The least average rental rate at $2.83/ square foot is in the Southeast submarket of Davidson and Rutherford counties.
A consolidation of data of all the areas show that the average asking rates is currently at $3.1/ square foot vis-à-vis $2.83/square foot in 2011, an increase of over 9.5%. At the same time, the direct vacancy rate has dipped below the 9% mark.
Tom Davis, Colliers vice president says in the report, "The positive exponential growth in the industrial real estate markets in Nashville area will continue through 2013. This is largely because Nashville is a great industrial location."
The Ashton Real Estate Group of RE/MAX Advantage
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