When you think about Nashville, Tennessee, you may think about bluegrass bands and southern hospitality. Yet the city has become a booming commercial industry market that is attracting people from all across the country. Major corporations in the healthcare, tourism, technology, and education industries are coaxing people from the larger cities across the country to come to Nashville for the work and educational opportunities that are available. Due to the increasing workforce, the city capital of Tennessee has seen a significant uptick in the commercial real estate market as businesses are also moving to the region to take advantage of the growing market potential.
Nashville is in the Top Ten Major Cities for Commercial Real Estate
The Emerging Trends in Real Estate 2016 Report from PricewaterhouseCoopers, a multinational accounting/consulting firm, took an in-depth look at the top commercial real estate markets across the United States. Ranking cities on a number of investor and real estate development factors, Nashville ranked 6th for having good overall real estate prospects in investment and development with a strong market outlook. Investment opportunities were scored a 3.67 out of 5 and development was 3.55 out of 5.
For a localized score in the commercial real estate market located in the South and Mid-Atlantic, Nashville, TN had a score of 4.07 out of 5, which shows that the area has a strong growth potential and demand outlook. This score came from local participants — such as investors, developers, and commercial businesses — who believe that Nashville has an improving real estate market due to a strong economy, local development, redevelopment opportunities, investor demand, capital availability, and other factors.
Nashville Commercial Real Estate Trends
The future commercial real estate outlook currently illustrates that Nashville, Tennessee has entered an upper-tier secondary market that is driving investor demands and creating more liquidity in the market. Businesses are finding the commercial real estate a viable and prosperous opportunity as they have the debt capital and equity capital available. However, there are still several caveats that the Emerging Trends in Real Estate 2016 report touched upon. The market in this region risks the chance of overbuilding.
Adding too much commercial real estate developments that are not in immediate demand may have an impact for industrial building types in the market. Another factor that investors and developers must take into consideration is the availability of land that is zoned appropriately for all types of commercial buildings. Luckily, with the increase of prices for building supplies, materials, and labor, the commercial market in the Nashville region may be able to keep at a steadily growing pace without overheating the real estate potential in this region. Furthermore, as touched upon in our previous blog, the Nashville area is embracing revitalizing and renovating old buildings, which assists with the overbuilding fear while still being cost-effective for some investors.
Nashville is a developing market that is gaining recognition in the commercial real estate world. With that said, be wary of making the mistakes of skipping your due diligence and by assuming that all areas are the same. That’s why a commercial appraiser is so essential, an appraiser can provide you with a clearer understanding about your real estate investment as we can provide you with our comprehensive appraisal services. We are here to help. Get started with a quick quote, or to get the appraisal process started, contact us. Our Senior Managing Director of our Nashville office, Vince Howell, MAI, who is our expert in the area will be happy to help. We look forward to hearing from you.