Boosted by a diversifying economy, Nashville is recording unprecedented population growth and major job announcements. These are reshaping the urban core and impacting the multifamily industry: Music City was one of the top 10 major U.S. metros for rent growth in the 12 months ending in June, with the average rate rising 4.1 percent year-over-year. And despite last year’s development cycle peak, occupancy in stabilized properties dropped just 10 basis points over 12 months, to 95.0 percent as of May.
Job growth is robust, with employment recording a 2.9 percent year-over-year uptick as of May, well above the 1.6 percent U.S. rate. The metro gained 23,200 jobs, with leisure and hospitality leading the way (6,900 jobs). The professional and business services sector is poised for continued increase, boosted by company relocations and expansions. Amazon’s $230 million investment is set to bring 5,000 high-paying jobs to the city; AllianceBernstein, relocating from Manhattan, has already filled 250 of the 1,050 positions announced; SmileDirectClub’s $217 million investment will more than double the company’s footprint in the metro.
Roughly $470 million in apartments traded in the first half of 2019, with investors bullish on value-add assets. With 7,427 units underway and matching demand, we expect Nashville rents to maintain their 4.1 percent rise in 2019.