Rick Frazier Vice President of Marketing & Leasing Alex S. Palmer & Company

The most significant trend in the Nashville, Tennessee, office market is the absence of speculative development. “The only development activity has been projects that have achieved a prudent amount of pre-leasing prior to the start of construction, which is characteristic during the type of market conditions that we are currently experiencing,” says Rick Frazier, vice president of marketing and leasing with Alex S. Palmer & Company.

Recent significant developments include

• Burton Hills IV: phenomenal success in the marketplace because it opened up 80 percent pre-leased.

• Roundabout Plaza: significant project signaling the success of revitalizing Midtown Nashville.

• West End Summit: part of the crescendo of the effort to revitalize Midtown (scheduled for delivery in 2006).

The majority of development is taking place on the West End in the heart of Midtown Nashville. “I think that this is due in part to the fact that more and more companies and corporations are making the West End corridor the place to do business in Nashville,” says Frazier. “It is primed for growth and continues to be a hot area with several future development sites slated to come on line in the next couple of years.”

Noteworthy leases that have closed recently include

• Union Planters: approximately 77,000 square feet at Highland Ridge I (555 Marriott Dr.).

• CareMark: approximately 20,000 square feet at Commerce Center Building (211 Commerce St.).

• Boult, Cummings, Connors & Berry: approximately 80,000 square feet at Roundabout Plaza (between 16th and 17th avenues).

While no one tenant takes a majority of space in Nashville, the healthcare industry absorbs a majority of the office space.

The rental rate range for Class A property in Nashville is between $20 and $25 per rentable square foot. With regard to vacancy rates, the overall Nashville market is sitting at about 16.4 percent vacant, which is up approximately 2 percent from last year.

“Nashville has weathered the economic downturn much better that many of its market competitors due to efforts by the Nashville Chamber of Commerce, particularly the Economic Development Team and Partnership 2010, as well as prudent development and investment,” notes Frazier. “Nashville is currently poised to come out of the economic downturn ahead of the game.”

©2003 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.