The Nashville office of CB Richard Ellis has released its commercial real estate numbers for Q1 2012, with the report highlighted by a letter from Managing Director Tom Frye.
Frye describes office and industrial absorption during the quarter as "solid" and tips his hat to the rise in commercial property sales, saying "capital has begun to flow to places like Nashville where there is a good story to tell." In contrast, he noted the area’s commercial real estate weak spot continues to be office vacancy (above 20 percent) for the central business district.
Our weak spot continues to be CBD office vacancy – still above 20%. I have chirped about this for four years now as being a temporary phenomenon. Still I believe it is temporary (just a lengthy temporary). Downtown is where the buzz is, dramatically improving, but not yet a 24 hour city. The closer we are to being that, the more office occupiers we will see.
Opening our new convention center in April of next year will be one more step in the enhancement of the downtown experience. It should spawn retail establishments, more hotels and yes, traffic too…better for the buzz, not better for parking issues. So we will embrace the good and deal with the not so good. Fortunately, our city leadership continues to be understanding of the issues and willing to confront them.
The rest of the year we expect to see measured improvement…overall, better than 2011 and probably a remarkable increase in industrial absorption. We are cautious, but like what we see at the moment.