Construction cranes continue to populate the skies across Nashville’s urban core. But there’s plenty of dirt being moved farther afield, as well, showing that Davidson County’s continued growth is continuing good news for the counties that surround it.
Whether it’s Williamson, Wilson, Sumner or Cheatham (not to mention Robertson and Dickson), the counties that surround Davidson are building, renovating and adding commercial square footage – both office and industrial – at a solid pace.
Three major interstates converge near downtown Nashville, creating easy – depending on the time of day – and substantial access for commercial developers who want to be in Middle Tennessee but remain outside the city’s footprint.
There’s also Metro’s rapidly expanding airport, as well as smaller ones scattered around the area, joined by long-standing rail lines and even the Cumberland River as a way to move goods.
And finally, there are major surface roads (the many pikes) connecting the counties, creating a secondary line of easily accessible properties that have appeal for office and/or industrial parks, condo and apartment complexes, restaurant and retail hubs, and even small- to midsize subdivisions.
That helps keep Middle Tennessee inoculated against building slowdowns due to higher interest rates and other factors.
“Traditional cost of financing has caused a slowdown overall,” says Ben Claybaker, principal with NAI Nashville Stanton Group. “But Nashville still is robust in projects. The cost of land closer to the central business district does push development into the feeder counties, especially as rooftop starts continue to be pushed out. Office, retail and mixed use usually follows suit.”
Headed south
What kind of commercial space is being built is often driven purely by market demand. Companies who are lured to Middle Tennessee for tax rates or other purposes often bring employees who want a high quality of life for their nonwork hours while they’re on the job. And the available land needs to be suitable for construction without too much leveling or other remediation.
“There is always activity in the Nashville core, where there is urbanization and a specific life experience,” says Janelle Gallagher, first vice president within the Advisory & Transaction Services Group in CBRE’s Nashville office. “And a lot of those same goals are being met in properties in Williamson County. Franklin, Brentwood and Cool Springs as an area are the second-most populated pocket in town from an office perspective, because there’s a lot of demand there and owners are stepping it up.”
Gallagher describes a “flight to quality,” or “flight to experience” mindset, which is basically commercial tenants listening to their employees and either adding or expanding amenities that can be anything from on-site gym facilities to walkable restaurants and retail within larger complexes.
“People who live outside the city don’t necessarily want to commute into town every day if they can have the same experience closer to home,” Gallagher says. “That’s a possibility now. Larger companies like Mitsubishi Motors North America and Kaiser Aluminum in Franklin and In-N-Out Burger coming to near Berry Farms are just two examples of how that side of town as a location is very attractive to major corporations. Those areas offer things like good public schools, which their employees value, so those companies want to also offer a high-end office experience along with a lower commute time for them.”
“Williamson County seems to still be in the lead on development,” Claybaker echoes. “Rutherford County and Wilson County also have a lot of projects starts, with Rutherford having a slight lead right now.”
East, Southeast remain popular
Business parks and more industrial sites continue to break ground in the surrounding counties. That’s because they can lure tenants who, like their more white-collar counterparts, want to be as close to Nashville as possible and get the best bang for their buck.
“We spend a lot of time along I-40, the I-840 loop and I-24,” says Jack Armstrong, first vice president broker with CBRE Nashville. “Mount Juliet and Lebanon have seen a lot of development over the last couple of years on a speculative basis, on top of what was already there.
“These spec builders are putting in build-to-suit properties and then pursuing tenants because there’s enough demand to support that growing business-site population.”
Kaiser Aluminum moved its headquarters to 1550 W. McEwen Drive in Franklin.
-- Photograph ProvidedArmstrong adds that the stretch of 840 heading toward Rutherford County, capturing LaVergne, Smyrna and even parts of Murfreesboro, are particularly active.
“Developers are trying to keep ahead of the demand that Nashville has for space, and there too there is a flight to quality,” he says. “You’re seeing things like LED lighting and other attention to detail in property aesthetics, and even office-storefront types of construction that you may not have seen outside office-class sites before. Industrial tenants are asking for and getting a more pleasing look and feel to their properties.”
“It really seems to still be a good variety of developments. Cost keeps industrial at bay along the I-65 corridor, making mix used a top development type for that area,” Claybaker says. “Rutherford also has a few office buildings going up.”
North and West topography
Although there’s still plenty of open land heading up interstates 65 and 24 and west along I-40, there’s one problem: It’s vertically challenging.
Mitsubishi Motors North America moved to Franklin in September 2019 and moved into this new headquarters office in 2020.
-- Photograph Provided“You do see some building going on heading west, especially in the Cockrill Bend area, but if you go much farther west, you’re going to see a lot of rolling hills,” Armstrong says. “That’s not conductive to building a lot of warehouses, which need flat land.
“There’s also the issue of utilities and other infrastructure. Right now, there’s not too much interest, but there was some activity in those areas just after COVID reopenings began,” Armstrong continues. “The fact that people dipped their toes in says that while we’re not there yet, in the coming years you may see more interest in markets like Dickson as the area continues to grow.”
It’s similar going north, he adds, noting that there has been some speculative development nonetheless, and investors are taking a closer look at that side of the Metro Nashville area, as well.
“We’re seeing some developments in White House and even as far up as Portland, so there’s interest,” he says. “There already are some big properties there, and they are successfully leased. What was once seemed as a bit pioneering has been shown to have value as Nashville has growth.
“It’s the same as on the South side – people want to live close to where they work, so if they are already along the I-65 corridor, say in Goodlettsville, then whether it’s office or industrial, they want something that’s not across the county.”
Will residential, businesses follow?
Another real estate chestnut is “retail follows rooftops,” which might be true for residential developments such as suburbs. What about commercial development? Depends on whether it’s a new footprint in undeveloped territory, or something being developed alongside existing housing.
The highly anticipated expansion of McEwen Northside, a 45-acre mixed-use urban district within Cool Springs, is on the horizon as construction begins on the site known as “Block E.” With an anticipated completion date of Spring 2025, Block E will take the McEwen Northside district to approximately 80% completion.
-- Photograph Provided“When you see job creation by industrial and manufacturing development in a rural area, it can help established communities to grow,” Armstrong says. “If more people move in, then retail and restaurants will follow suit. But if you’ve got millions of square feet of industrial and not much else around it, seeing any kind of other rooftop might take a while.
“A lot of what has been developed along I-840 is on what was agricultural land, so no one was living there,” Armstrong continues. “Over time, though, you’ll probably see some multifamily developments coming along on the land that’s left near them, because as in other areas people want to live close to where they work.”
“Retail follows office developments a little more quickly, and usually the residential component is already in place,” adds Gallagher. “You’re also seeing some landlords in places like Williamson County putting storefronts right into their office parks, where before there might have only been more parking.
“With hybrid work schedules and other shifts in today’s workforce, they are seeing that a small retail presence,” Gallagher says, “which allows for people to get shopping done while at work, is as much of an office amenity as anything else.”