Retail Humming Along in Music City
Grandpa Bar at Apex Marathon Village
According to Costar, retail is a rock star property type in Music City. In Nashville, the retail vacancy rate is a low 3.2% (compared to 4% nationally), and non-mall retail vacancy is just above 2%. (With a current vacancy rate of a whopping 18.1%, the Nashville mall sector is significantly worse, but indoor malls are struggling all over the country, so this is to be expected.) Nashville continues to have robust tourism, a growing population, and new retail development that has kept to a modest pace. Consequently, retail is poised to perform very well for at least a while longer. It is unlikely that there will be oversupply in the Nashville area retail market in the near term.
At the time of writing, Nashville’s average market rent per SF is about $28. This is compared to the national average of $25 per SF. Anyone in retail leasing will tell you, though, that at newer properties in trendy areas such as the Gulch and 12South, asking rents can be double this amount, and rents in some of the hot developments in the suburbs, such as the Factory at Franklin, are creeping up as well.
Retail is performing strongly nationwide. As of Q3 2023 through November, not one of the 54 MSAs profiled in the Mueller Real Estate Cycle Monitor has tipped over into hypersupply or recession. All of this, of course, is great news for landlords; however, it poses fiscal challenges for tenants, as they they attempt to get into retail space at reasonable rates. As much as ever, it behooves tenants to get qualified representation that really knows the market they are entering into.
Sweat440 Music Row
High Point Coffee, Oxford MS
In 2023, Chandler James Retail Team assisted multiple concepts that were entering the Nashville Market for the first time, most notably Oxford, MS based coffee shop High Point Coffee; Marathon Village’s new coffee-and-cocktail concept Grandpa Bar; and the growing fitness franchise Sweat440, with two new locations on Music Row and in the Gulch. We were successful in getting them competitive rates and terms, and all three are proving to be big wins not only for the tenants but for the landlords as well.
We are very excited to be joining a new firm, Lee & Associates Nashville (more about this in a later post) and are looking forward to big things again in 2024. Happy New Year, Nashville!
