Nashville Multifamily Report – Winter 2019
- Mar 29, 2019
Strongly boosted by its creative class, Nashville has emerged, over the last decade, as one of the most desirable places to do business in the U.S. This continues to fuel rental demand, with supply bringing record delivery numbers in the past two years. Rents rose 2.9 percent year-over-year through January to $1,240, while the occupancy rate in stabilized properties inched up 20 basis points to 94.8 percent.
Employment growth softened gradually in 2018, sliding to 1.9 percent year-over-year in November, trailing the 2.1 percent national rate. The metro added 22,200 jobs, with professional and business services (8,900 jobs) and trade, transportation and utilities (8,200) leading growth. Circumstances, however, remain favorable for growth in Music City. Amazon’s new operations hub at Nashville Yards is set to employ 5,000 people over the next seven years, Ernst & Young plans to add 600 jobs over the next five years, and the regional international airport BNA is undergoing a $1.2 billion expansion, slated for completion in 2023.
Nearly $1.3 billion in multifamily assets traded in 2018, a cycle high. The per-unit price rose 8.9 percent in 2018 to $152,124, even though investors mostly focused on value-add properties. With 9,260 units underway after the 7,412 delivered last year, we expect rents to rise 2.0 percent this year.