The local multiple listing service (MLS) estimates that 82 people a day move to Nashville. That’s roughly 30,000 new arrivals per year. Nationally, Nashville ranked fifth in 2022 among the most popular largest U.S. cities in which to move.
So, what draws people there?
As it turns out, Nashville has been attracting quality jobs for some time. According to Stessa, a provider of real estate management software for investors, the Nashville metro area had 14,510 six-figure jobs in 2015, a number that increased to 53,820 positions by 2020, which means that Nashville had the biggest growth rate for high-paying jobs among large metro areas.
“With a population quickly approaching two million, Nashville is a vital business, tourism and transportation center,” said Marc DeLuca, CEO and Regional President, Eastern U.S. at KBS. “Nashville boasts a thriving economy that is predicted to see a 3.9% growth in employment in 2022. This activity creates numerous office-using jobs and significantly increases the rental growth and demand in the market.”
Several recent arrivals explain Nashville’s growing importance as a commercial hub.
Amazon and Oracle Hit High Notes in Music City
Hundreds of major metro areas competed in 2017 to win the Amazon HQ2 project, an opportunity to land an estimated 50,000 office jobs plus $5 billion in development money to create a second headquarters for the giant retailer. The winners were announced in 2018, and the huge project was divided between New York City and a site in Northern Virginia just a few Metro stops from Washington, D.C., and Capitol Hill.
When Amazon divided the HQ2 project between the New York and D.C. metro areas, the headlines largely ignored what Amazon actually said. Amazon announced the two winners, but — importantly — also disclosed that it was creating a new “Operations Center of Excellence” in downtown Nashville that would employ 5,000 full-time workers.
The Amazon success was a big deal, and it wasn’t a fluke: Nashville notched another big win not long thereafter.
If you’re a city or state government, one of your top development priorities is to bring in new jobs and the tax revenues they generate. Not just any jobs, but jobs of the future, the ones that pay well and provide healthy sustainable growth for the city’s future.
Oracle, a computer software company, has such jobs. In 2021, Nashville again scored when Oracle announced plans to establish a 60-acre office complex that will ultimately employ 8,500 workers in the city. Not only is the project worth $1.2 billion, but the typical worker will earn an estimated $110,000.
Nashville’s Key Growth Drivers
According to the Nashville Chamber of Commerce, the leading local industries by job count isn’t just music, but healthcare management (167,916), advanced manufacturing (86,425), tourism and hospitality (74,440) and technology (62,876). Music and entertainment pull up in fifth place with over 41,000 jobs.
The city has made a remarkable turnaround since the worst days of the coronavirus pandemic. “Unemployment,” says Colliers, “has dropped dramatically from 16% in April 2020 to 2.7% in May 2022. The office sector continued to grow with job growth up 9% at the end of Q2 2022 compared to Q1 2020.”
The New York Times has a list of all restaurants in the U.S. and names the “50 places in America we’re most excited about right now.” For 2022, the list included two Nashville favorites: Audrey and Locust. That rivals the same number of exciting restaurants listed for Washington, D.C., and San Francisco, California.
Whatever your interest, Nashville likely has it. The city has long been recognized as a leading music center, home of the Grand Ole Opry, Ryman Auditorium, and free outdoor concerts at Centennial Park. Downtown has live music with no cover charge at many clubs and bars, plus the city has opera and ballet companies. You can take in professional sports with the NFL’s Tennessee Titans or Nashville Predators of the NHL.
Nashville is actually larger than such major metro centers as Chicago, Los Angeles or New York in terms of square area. However, it has a much smaller population and thus far less density. One result is that the metro area has 12,000 acres of green space with lots of places to play, picnic and walk.
Tennessee doesn’t have an individual income tax. That’s good news, but the better news is that other taxes are also low. The District of Columbia recently compared the cost of income, property, sales and automobile taxes as a percent of income for a family earning $100,000 a year. The results by location showed that Tennessee had one of the lowest tax costs in the country.
Three-quarters of the U.S. market is within two hours of Nashville by air. The city is served by 20 air carriers, offers nearly 100 nonstop destinations, and its airport is just eight miles from downtown. If you prefer driving, it’s less than seven hours by car to Pensacola’s sandy white beaches and just eight hours to Chicago’s Museum of Science and Industry.
The relationship between jobs and homes is best explained by Redfin CEO Glenn Kelman. In a 2017 interview, Kelman told CNBC that “technology companies, the Wall Street companies, they’re chasing the talent, [and] the talent is chasing affordable housing.”
Like much of the country, there has been strong demand for Music City homes. According to the National Association of Realtors (NAR), Nashville home prices in the second quarter were 19.8% higher than a year earlier.
Such increases raise affordability issues for buyers. However, in the particular case of Nashville, rising home costs are offset by several factors.
- First, while Nashville home prices have strongly increased, at the end of the second quarter the typical metro area residence sold for $418,500 according to NAR. That’s substantially less than real estate prices in other leading markets; in some cases, just a half, or a third, or a fourth of home values elsewhere.
- Second, according to the Nashville Chamber of Commerce, the area cost of living is below the U.S. average while local incomes are roughly 5% higher. This means wages go further in the area than in many other locations.
- Third, moving from high-cost areas can cut annual tax expenses by $3,000 to $10,000 per $100,000 in income, according to the Chamber.
UBS Tower, the Essence of Nashville
UBS Tower is in the heart of Nashville. Rising 29 stories, it offers 605,000 square feet of Class A office space at 315 Deaderick Street.
The building — which spans a full city block — faces Public Square Park, which features large outdoor concerts and festivals. No less important, it’s centrally located. Go a few blocks west and you’re at the state capitol complex. Nissan Stadium, home of the Tennessee Titans, is to the east, and if you head south, you’re near Broadway’s famous nightlife, the historic Ryman Auditorium, and the National Museum of African American Music. Have people coming for meetings? UBS Tower is just a short distance from many of the city’s leading hotels.
“The property offers unobstructed views of downtown, move-in ready full-floor spec suites and superior access to executive housing to the west and south via Charlotte Avenue,” said Allen Aldridge, senior vice president of acquisitions, dispositions and co-director of asset management for KBS.
The building — purchased by KBS in August 2022 — is now being upgraded and improved.
“We plan to make UBS Tower even better by adding in-demand features, such as a coffee bar located in the lobby, bike room and shower, dog recreation area and modernized façade,” said Aldridge. “We also plan to add electric car charging stations and verify the building with UL Healthy Buildings since we are constantly looking for ways to incorporate eco-friendly property amenities that elevate the tenant experience while reducing our carbon footprint.”
“Not Just Another River Town”
According to Tim McGraw, Nashville wouldn’t be Nashville without you. So come to Nashville. Come for the music, the food, the fun and the lifestyle. Join the more that 80 people who move to Music City daily — and stay for the myriad opportunities.
Learn more by visiting KBS.com/Insights.