Nashville Office Market Faces Headwinds as Professional Services Jobs Decline

Nashville's commercial real estate market is experiencing a notable softening in office demand, driven by significant job losses in key sectors. According to recent U.S. Bureau of Labor Statistics data, the city lost 4,600 office-using jobs in May compared to the previous year, with professional and business services down 1.6%, financial activities declining 1.5%, and information sector jobs dropping 0.6%. This employment decline has directly impacted office leasing activity, which decreased by over 11% during the same period, contributing to Nashville's office vacancy rate reaching its highest level in over 25 years.

Despite these challenging trends, the market isn't in complete freefall. Some bright spots include a 42% quarter-over-quarter increase in leasing activity during Q1 2025, though this followed the weakest fourth quarter in four years. Major transactions like Holland & Knight's 141,000-square-foot lease at Symphony Place and Oracle's 60,000-square-foot expansion at Capitol View demonstrate that quality tenants are still making moves. However, with continued speculative construction and evolving office space needs, Nashville's office market faces a mixed outlook as population growth battles against declining demand from traditional office-using employers.