SOUTHEAST SNAPSHOT, JULY 2007
Nashville, Tennessee Industrial Market
New development is on the horizon for the Nashville industrial market. Opus South has purchased 164 acres at the corner of State 840 and Couchville Pike in Wilson County. Opus South plans to build an industrial park that will include three 700,000-square-foot buildings and one 140,000-square-foot building. Meanwhile, the 363,250-square-foot Elam Farms I is under construction in the Southeast submarket. Panattoni has five buildings proposed for Elam Farms I.
“There is 600,000 square feet of industrial space under construction in the Southeast submarket,” says Scott Harrison, vice president of Nashville-based Richard Bowers & Co. “The submarket will continue to see the largest growth and the most positive absorption because it’s a major Interstate corridor for manufacturing support.”
Leasing and investment activity are remaining steady in the Nashville industrial market. “Nashville is experiencing a combination of high-tech and manufacturing support in the leasing market,” Harrison says. That support has been led by Comprehensive Logistics, which leased 308,000 square feet in The Crossings in the Southeast submarket. Also in the Southeast submarket, ModusLink added an additional 90,000 square feet in Southpark D. Last year, ModusLink originally leased 150,000 square feet in Southpark D.
According to Harrison, vacancy rates are averaging 6.6 percent in Nashville with the highest vacancy rates seen in flex space at 13.9 percent. Rental rates average from $3.23 per square foot for bulk distribution facilities to $9.62 per square foot for flex space. “The largest trend in the Nashville industrial market is the decline of net absorption from 1.6 million square feet at the end of last year to 400,000 square feet at the end of the first quarter of this year,” Harrison says.
Some of the major industrial sales in Nashville for 2007 include First Industrial’s sale of Rockdale Distribution II to USAA Real Estate, which sold MidSouth Logistics VI to London, England-based Strategic Real Estate Advisor. The 597,546-square-foot Cumberland Distribution Center was sold to a Boston-based investor for $19.9 million.
— Daniel Beaird
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