SOUTHEAST SNAPSHOT, JULY 2004

Nashville Industrial Market

Whitfield Hamilton, SIOR Managing Principal Colliers Turley Martin Tucker-Nashville

“We are seeing new development in Nashville, Tennessee’s industrial market,” say Whitfield Hamilton and David McGahren of Colliers Turley Martin Tucker-Nashville. “This is a result of recent absorption and current lack of Class A cross-dock (400,000-square-foot-plus) facilities.”

The majority of tenant demand in past years has come from the automotive industry. Suppliers have recognized the location benefit Nashville provides and have chosen Nashville as a strategic location. Additionally, Nashville has drawn technology companies — Dell and Hewlett Packard — that continue to expand. Nashville’s central location also attracts third-party logistics providers with regional and national influence.

There have been several major tenants coming into Nashville over the years, including Dell (629,030 square feet), Gap Distribution (4 million square feet), Associated Wholesale (804,659 square feet), Bridgestone Firestone (757,950 square feet) and Waldenbooks (564,300 square feet).

David McGahren, SIOR Industrial Division Leader/Principal Colliers Turley Martin Tucker-Nashville

Another new major tenant is Cinram International, with more than 1.2 million square feet. Cinram is one of the world’s largest manufacturers of pre-recorded DVD, VHS, video cassette, CD-Audio, CD-Rom and audio cassettes. Battery-maker Rayovac recently took 266,000 square feet and BAX Global Logistics leased 403,750 square feet. BAX is a supply chain management and transportation solutions company offering mode-neutral logistics management for business-to-business shippers worldwide.

The range for industrial rental rates in the Nashville area is $2.75 to $3.25, depending on class of building.

New developments include a project by Panattoni Development Company. The firm will kick off the first true spec Class A facility (456,000 square feet) in more than a year at Commerce Farms on the Interstate 40 East corridor.

For the near future, keep an eye on the new Joe B. Jackson Interchange south of Murfreesboro, Tennessee, Highway 109/Highway 840 and Interstate 40 East market. These are the only areas that offer affordable and available development sites. East submarket (Wilson County) has activity because land is both affordable and available.

“After 2 years of flat demand, Nashville has definitely turned a corner,” say Hamilton and McGahren. “Leasing activity is on the rise, and absorption and rental rates have stabilized. Investors continue to view Nashville as an attractive investment market. In short, the outlook is excellent.”

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