Economy
Nashville's economy maintained steady growth, with employment rising 0.8% year-over-year (YOY) to more than 1.2 million jobs. The metro's unemployment rate remained low at 2.9%, 130 basis points (bps) below the national rate of 4.2%. Manufacturing employment increased 0.6% YOY to 88,700 jobs in August, supporting the region's industrial economy. Tennessee ranked third in Area Development’s 2026 Top States for Doing Business, driven by strengths in site readiness, industrial space availability, energy capacity, and logistics infrastructure, positioning Nashville for continued industrial success.
Supply And Construction
With net absorption of 999,261 sf largely offsetting new supply, Nashville’s overall vacancy rate held steady at 5.1%, unchanged quarter-over-quarter (QOQ) and up 52 bps YOY. Vacancy decreased most significantly in the East, falling from 8.9% to 8.1% QOQ, supported by the market’s strongest occupancy gains.
Nashville delivered 1.1 million square feet (msf) of new industrial space in Q3, the second consecutive quarter of more than 1.0 msf of new supply, bringing year-to-date completions to nearly 3.4 msf. Five of the quarter’s six new deliveries were in the Southeast submarket. The smallest of the six, CO-OP Business Park – Building 1 (79,380 sf), was preleased in full by four smaller tenants.
The active construction pipeline expanded from 5.8 msf to 7.5 msf in Q3. The East submarket accounted for the largest share of the pipeline at 3.7 msf, nearly half of Nashville’s total, including 2.1 msf across Central Pike Logistics Center and The Cubes at I-40. The Industrial Central Business District (ICBD) pipeline also more than doubled QOQ to 1.5 msf as five buildings exceeding 100,000 sf each broke ground during the quarter. Of the 7.5 msf underway, about 4.9 msf is slated to deliver in Q4. Build-to-suit projects account for 1.1 msf of the pipeline, led by Northpark Logistics Building 5 (530,880 sf), and 0.6 msf of the speculative space underway is already preleased.
If everything slated to complete in Q4 delivers on time, 2026 would finish with roughly 8.3 msf of new supply, up 71.0% from 2025 and about 7.5% above the five-year average of 7.7 msf.
Pricing
Overall asking rents across Nashville remained relatively stable, increasing a modest 0.9% QOQ and 0.5% YOY to $9.19 per square foot (psf). The ICBD remained Nashville’s highest priced submarket, with overall rents of $11.12 psf and direct rents—which exclude sublease space offerings—of $11.24 psf.
The Southeast recorded the strongest quarterly rent growth, with overall asking rates increasing 6.0% to $9.76 psf. The increase reflected a shift in available vacant inventory, as higher-priced space returned to the market following tenant move-outs while leasing reduced lower-priced options. Asking rents also increased in 65-South, rising 1.3% to $9.79 psf. The North’s asking rents edged down 1.3% to $8.75 psf, while East rates remained essentially unchanged at $8.02 psf.
Demand
Nashville recorded 2.5 msf of new leasing activity in the third quarter, on par with Q2 and exceeding four of the last five quarterly totals. Leasing was up 65.6% from Q3 2025, though year-to-date leasing remains 15.1% below the same point in 2025. The East led all submarkets with 1.4 msf across six deals, followed by the ICBD (548,350 sf) and the Southeast (438,054 sf). Two East transactions—Modular Power Solutions’ 600,285-sf lease at Cedar Farms II and Lagrand’s 400,064-sf lease at Speedway Industrial Park Building 15—accounted for 40.2% of Nashville’s new leasing.
Renewal activity totaled 740,863 sf, down 81.9% QOQ following an unusually strong Q2 with 4.1 msf driven by East and Southeast renewals. The largest Q3 renewals were Christie Lites’ 141,032 sf at Cedar Creek and Sunrise Medical’s 134,640 sf at Beckwith Farms – Building 1, both in the East submarket.
Net absorption totaled nearly 1.0 msf in Q3, bringing year-to-date occupancy gains to 1.9 msf. The East (473,785 sf) and the Southeast (369,538 sf) accounted for 84.4% of quarterly absorption. Major move-ins included Modular Power Solutions at 135 Logistics Drive (600,285 sf) in the East submarket and Bay Logistics at Rutherford Business Center (226,938 sf) and Connectiv at MidSouth Logistic I (199,799 sf) in the Southeast submarket.
