2nd quarter 2011
NASHVILLE MARKET Office Report

The Nashville office market lost some steam in the second quarter of 2011. The average asking rent dropped to $19.67/sf in the second quarter from $20.08/sf in the first quarter of the year, reflecting the lowest rent since the third quarter of 2007. Nashville experienced the first quarter of negative net absorption since the beginning of 2010, with negative 6,048 square feet. The vacancy rate for the second quarter was 13.5%, showing no change from the first quarter of 2011 and still below 15.3% recorded one year ago. The amount of office space under construction remained unchanged at 249,600 square feet.

Downtown Nashville saw the average asking rent drop in the second quarter of 2011, falling to $19.40/sf from $19.74/sf in the first quarter, although it is still above $19.31/sf recorded one year ago. The vacancy rate was 23.1% for the second quarter and total net absorption was positive for the third consecutive quarter, with 17,508 square feet being absorbed. The second quarter of 2011 marked the seventh straight quarter with limited construction activity Downtown, with the last delivery of office space occurring at the end of 2009.

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