Ashley Capital puts together the latest statistics for leases, sales, and construction in Nashville’s industrial real estate sector. Every quarter the most prominent deals are listed in order to illustrate the current state of the market.
It goes without saying that the most recent quarter will be affected by the current pandemic; however, the sentiment in Nashville is quite optimistic given the circumstances.
The Nashville industrial market is somewhat unique in that in early March, before the quarantine due to Covid, devastating tornados ravaged the industrial market where in one night over 4 million square feet of product was lost or damaged beyond occupancy. This caused several tenants to snatch up available vacant spaces in an effort to stay operational.
In a market that was already supply-constrained, this caused our vacancy rate to dip from 3.5% vacant at the year’s end down to 2.5% at the end of first quarter 2020. It is expected this vacancy rate will fall further. So far, due to Nashville being a very diversified industrial market, there have been no significant negative ramifications due to Covid.
In fact, e-commerce related requirements are one of the industry sectors causing a decrease in vacancy as everyone weathered through the quarantine by ordering items online and having them delivered to their homes. The supply-demand imbalance is causing rental rates to continue to rise and landlord concessions to remain low.
– Doug Howard, Managing Director @ Ashley Capital
Top Nashville Industrial Real Estate Lease Statistics – Q2 2020
12 Month Deliveries in Square Feet: 3.7 million (4.6 million in Q2 2020)
12 Month Net Absorption in Square Feet: 1.3 million (3.4 million in Q2 2020)
Vacancy Rate: 4.0% (3.5% in Q2 2020)
12 Month Rent Growth Rate: 6.1% (7.7% in Q2 2020)
Top Milwaukee Industrial Leases (Past 12 Months)
1) Property: 437 New Sanford Rd
Submarket: Southeast
Leased SF: 770,000
Quarter: Q4 2019
Tenant: Technicolor USA, Inc
Tenant Rep: NorthStar Real Estate
2) Property: 1000 Hixson Blvd
Submarket: Wilson County
Leased SF: 558,600
Quarter: Q2 2020
Tenant: FedEx
3) Property: 350 – 400 New Sanford Rd
Submarket: Southeast
Leased SF: 518,667
Quarter: Q4 2019
Tenant: Essex Technology Group
Tenant Rep: ProVenture, LLC
4) Property: 245 Couchville Industrial Blvd
Submarket: Wilson County
Leased SF: 427,301
Quarter: Q4 2019
Tenant: Electrolux USA
Leasing Rep: JLL
5) Property: 1000 Darrell Waltrip Dr
Submarket: Wilson County
Leased SF: 443,968
Quarter: Q1 2020
Tenant: FedEx
Leasing Rep: ProVenture, LLC
Top Nashville Industrial Sales Statistics (Past 12 Months)
Sales Comparables: 237 (223 in Q2 2020)
Average Cap Rate: 5.7% (6.3% in Q2 2020)
Average Price/ SF: $70 ($70 in Q2 2020)
Average Vacancy at Sale: 5.3% (9.5% in Q2 2020)
Top Nashville Industrial Property Sales
1) Property: Dorman Products (1140 Vaughn Pky)
*Rating: 4
Year Built: 2019
Building SF: 997,000
Vacancy: 0%
Price (PSF): $115,141,937 ($115)
Cap Rate: Not Listed
2) Property: Building 1 (1000 Darrell Waltrip Dr)
*Rating: 4
Year Built: 2019
Building SF: 1,015,040
Vacancy: 0%
Price (PSF): $60,000,000
Cap Rate: Not Listed
3) Property: Building 1 (951 Aviation Pky)
*Rating: 5
Year Built: 2017
Building SF: 622,830
Vacancy: 0%
Price (PSF): $51,728,900 ($83)
Cap Rate: Not Listed
4) Property: Building 2 (12008 Eastgate Blvd)
*Rating: 5
Year Built: 2013
Building SF: 706,500
Vacancy: 0%
Price (PSF): $50,905,944 ($72)
Cap Rate: Not Listed
5) Property: Elam Farms 2 (3209 – 3263 Elam Way)
*Rating: 5
Year Built: 2009
Building SF: 363,500
Vacancy: 0%
Price (PSF): $40,614,558 ($112)
Cap Rate: Not Listed
*Rating is 1-5, 5 being the best
Nashville Industrial Construction Projects Statistics
Properties Currently Under Construction: 60 (67 in Q2 2020)
Total Size in Square Feet: 15,180,585 (8,931,008 in Q2 2020)
Percent of Inventory: 6.8% (4.1% in Q2 2020)
Preleased: 54.5% (46.3% in Q2 2020)
Top Nashville Industrial Projects Under Construction
1) Property: Amazon Project Sam (2349 E Division St)
Rating*: 3
Building SF: 3,600,000
Stories: 5
Completion: Q2 2021
Developer/ Owner: Panattoni Development Company
2) Property: Building 6 (1000 Darrell Waltrip Dr)
Rating*: 4
Building SF: 1,541,032
Stories: 1
Completion: Q3 2021
Developer/ Owner: Panattoni Development Company
3) Property: Prologis Elam Farms (Elam Farms Pky)
Rating*: 5
Building SF: 1,400,000
Stories: 1
Completion: Q2 2021
Developer/ Owner: Prologis, Inc
4) Property: Facebook Data Center (1432 Gateway Dr)
Rating*: 4
Building SF: 4982,000
Stories: 1
Completion: Q2 2023
Developer/ Owner: Not Listed
5) Property: Amazon Automated Fulfillment Center (2349 E Davidson St)
Rating*: 4
Building SF: 855,000
Stories: 1
Completion: Q4 2021
Developer/ Owner: Panattoni Development Company / Amazon.com Services, Inc
*Rating is 1-5, 5 being the best
Data Sources: Ashley Capital & CoStar