Nashville’s retail market remains exceptionally tight, with availability at 3.7% and construction failing to match tenant demand. Limited new supply and an aging inventory—over half built before 1990—continue to constrain options, pushing retailers toward older centers and prompting rapid lease-ups, often within seven months. Despite slowing rent growth, pricing power remains strong, with asking rents averaging $30/SF after a five-year rise of roughly 35%. Necessity-based and discount retailers are backfilling large vacated spaces, while affluent suburbs like Cool Springs and Brentwood command some of the metro’s highest rents. Strong absorption in key submarkets, rising competition for prime sites, and persistently low vacancy continue to underscore Nashville’s resilient retail fundamentals.

 

Key Findings

• Vacancy held at a tight 3.7% in Q4 2025 as limited new deliveries and aging inventory constrained options, sustaining strong absorption and heightened competition for quality retail space.
• Asking rents reached $29.95/SF with 5% annual growth, driven by rapid lease-up timelines and necessity-focused retailers expanding into older centers amid limited availability of modern supply.
• Sales volume closed the quarter at $152M, reflecting active private buyers targeting smaller assets while pricing stabilized near $295/SF and cap rates held firm around 6.2%

 

Nashville Retail Supply & Demand Dynamics

Source: CoStar Group, Inc.

 

Nashville Demographics

Source: CoStar Group, Inc.

• Unemployment Rate: 3.0%
• Current Population: 2,179,021
• Households: 897,087
• Median Household Income: $89,798

 

Nashville’s rapid population expansion remains its core economic engine, with the metro growing 6.4% since 2020, double the national pace, and surpassing 2.1 million residents. Strong international migration, contributing 38% of 2024’s growth, continues to fuel consumer demand and reinforce the metro’s role as a retail and logistics hub. Corporate investment remains robust, with major employers such as Amazon, Oracle, Nissan, and Bridgestone expanding across the region. Key industries like healthcare, technology, manufacturing, and supply chain, support a deep, educated labor pool. Ongoing corporate relocations, including Oracle’s $1.35B East Bank campus, further strengthen Nashville’s long-term retail fundamentals.

 

Population, Labor, & Income Growth

Source: CoStar Group, Inc.

 

Nashville Retail Construction

Nashville’s retail construction pipeline has slowed notably in 2025 as rising land, labor, and development costs limit new groundbreakings, despite a brief surge of 650,000 SF started in early 2025. Overall activity remains at a two-year low, pushing developers toward mixed-use projects, especially ground-floor retail in rapidly growing downtown multifamily buildings. Planned East Bank development tied to Oracle’s future headquarters and the Tennessee Titans’ 2027 stadium continues to take shape. In the suburbs, projects like Franklin’s Margin District add live-work-play components, while quick-service operators such as Dutch Bros and Whataburger drive most sub-10,000-SF development through high-traffic out-parcel sites.

 

SF Construction Starts

Source: CoStar Group, Inc.

 

SF Under Construction

Source: CoStar Group, Inc.

 

Nashville Retail Sales

Nashville’s investment activity remains retail-driven, with retail sales volume reaching $1.1 billion, about 9% above the historical average, despite multifamily traditionally accounting for the largest share of total sales. Private investors dominate ownership and continue to lead the buyer pool, driving a market focused on smaller, single-tenant assets, typically trading between $1–$3 million and $200–$500/SF. Limited institutional participation has kept large transactions muted, though select notable deals closed, including ExchangeRight’s $9.45 million Sprouts purchase at a 6.3% cap rate. Pricing continues to climb, with the market averaging $360/SF, up 38% in five years, as cap rates remain stable, generally below 6.5%.

 

Nashville Retail Sales Volume

Source: CoStar Group, Inc.

 

By the Numbers

Source: CoStar Group, Inc.

• Sales Volume: $152M
• Price Per SF: $295
• Cap Rate: 6.2%
• Vacancy Rate: 3.7%
• Rent Growth: 5.0%
• Asking Rent Per SF: $29.95
• Under Construction: 749K SF
• Delivered: 322K SF
• Absorbed: 232,795K SF