As Nashville closes out 2025, the industrial market has solidified its reputation as a resilient powerhouse in the Southeast. With record investment volumes exceeding $2.2 billion and vacancy rates remaining well below national averages, the Nashville MSA continues to attract distributors, manufacturers, and data center-related businesses.
This robust performance reflects a recalibration from pandemic-era highs while maintaining durable demand, setting the stage for balanced growth in 2026.
Trends shaping the market
Several macroeconomic trends are influencing Nashville’s industrial landscape. Nearshoring/onshoring and supply chain diversification have heightened the city’s appeal as a logistical hub. It is important to note that Nashville is strategically located within a day’s drive of over half the U.S. population.
Locally, job growth has outpaced the national average, with Oxford Economics reporting a 1.1 percent increase in 2025, bolstered by gains in manufacturing, logistics and retail. Notably, Moody’s Analytics highlights transportation equipment manufacturing as a key driver, as automakers increase domestic production to mitigate tariffs.
Further enhancing Nashville’s logistical capabilities, the planned expansion of air freight capacity at Nashville International Airport in 2027 is poised to solidify the region’s role in cargo throughput, supported by a robust highway network and a growing labor force. Despite broader economic uncertainties, such as potential tariff hikes, tenant activity remains strong.
Noteworthy projects
The vibrancy of Nashville’s industrial market is exemplified by several major projects currently under construction or recently completed. In the Southeast submarket, Quanta Manufacturing has secured a 564,300-square-foot lease at 1 Walden Books Drive, owned by Prologis, reflecting a strong demand for strategically located warehouse space. Similarly, SPX has leased 147,260 square feet at Creekside Logistics’ 8120 Tridon Drive.
In the North submarket, a confidential tenant has committed to 530,880 square feet in addition to a build-to-suit with Trane at Northpark Logistics, developed by Hamilton Development. This new Class A industrial park will serve the rapidly growing Clarksville industrial economy, which has recently announced projects of over $3.2 billion (LG Chem) and $5 billion (Korea Zinc).
Bulk leasing hit some new high watermarks in 2025, with over five separate half-million square foot leases being inked at over $7.00 per square foot. This is due in part to the lack of bulk industrial in the Nashville market, which stems from development constraints as well as the rapid growth Nashville continues to experience.
Notable projects currently under construction include the speculative Earhart Industrial Park Building 2 (1.2 million square feet) and Northside Logistics Park (353,007 square feet). Together, these developments are set to infuse the market with Class A options, catering to efficiency-focused occupiers, even as direct warehouse availability hovers around 10 percent.
Hotspots for development
The North submarket stands out as a hotbed for industrial development, driven by its proximity to I-24 and I-65 and expanding population centers in Middle Tennessee. With over 1.2 million square feet absorbed in the fourth quarter alone and an annual leasing total of 2.7 million square feet, vacancy rates have dipped to an impressive 2.6 percent. Factors such as land availability and ongoing infrastructure upgrades position this area as ideal for last-mile distribution, attracting third-party logistics providers and e-commerce firms.
The East submarket is also noteworthy, currently hosting 3.6 million square feet under construction, including speculative projects by IDI Logistics, which capitalize on airport access and favorable entry costs.
Investment sales velocity
Investment sales in Nashville’s industrial sector reached unprecedented levels, with fourth-quarter volume at $372 million, culminating in an annual total of $2.2 billion, which was a record for the Nashville MSA. The market is predominantly driven by out-of-state institutional buyers seeking stabilized assets in a low-vacancy environment. Ares Management’s acquisition of the 622,750-square-foot Airpark East Portfolio near the airport for $128.4 million exemplifies this trend, trading at a $ 206 per-square-foot premium.
Other notable transactions include North Haven Net REIT’s $38.2 million purchase of Nordic Nashville and Create Reimagining Renewables’ $31 million acquisition of RB Distribution. Sellers, often local developers or funds like EQT Real Estate, are capitalizing on compressed cap rates of 5 to 5.5 percent, driven by investor appetite for yield in Sun Belt markets and by Nashville’s ever-reliable rent growth and low vacancy rate.
Rental trends, outlook
Rent trends indicate moderation and continued outperformance. Overall asking rates reached $10.56 per square foot (triple net) in the fourth quarter, reflecting a 1.1 percent quarterly increase and a 6.2 percent annual rise, though four-quarter growth has slowed to its lowest level since 2014. This trajectory outperforms peer markets like Atlanta and Charlotte by over 200 basis points, supported by vacancy rates that are 120 to 280 basis points below national benchmarks across various building sizes.
As supply normalizes, rents are expected to stabilize, alleviating pressure on mid-sized tenants while favoring landlords in high-demand segments.
Conclusion
Overall, Nashville’s industrial market is navigating a maturing cycle with poise, leveraging its economic strengths and strategic developments to sustain its competitive edge. As the market continues to evolve, stakeholders can anticipate a landscape rich with opportunities.
— By Max Smith, principal and executive vice president, Colliers. This article was originally published in the February 2026 issue of Southeast Real Estate Business.