Study: Investors targeting Nashville as a ‘rising star’ city to park capital

Study: Investors targeting Nashville as a ‘rising star’ city to park capital

Nashville is one of the most attractive cities to investors, according to a report recently published by JLL Capital Markets.

Music City was one of eight “rising star” cities or “growth markets” identified by JLL (NYSE: JLL). The cities are becoming increasingly appealing for investment opportunities and are competing with “Gateway Cities” such as Los Angeles, New York City or San Francisco, for those dollars.

The other cities on the “rising star” list are Atlanta, Austin, Charlotte, Dallas, Denver, Miami and Raleigh.

The line between Gateway Cities and growth markets such as Nashville is likely to become more blurred in the near future. JLL’s study added gateways such as New York City or San Francisco will remain a magnet for residents and companies, but they will have greater competition from previously non-traditional markets.

JLL isn’t the only one noticing Nashville’s market strength emerging from the pandemic. The city was named among the 10 best places to live after the pandemic in a segment on the “Today” show. And the National Association of Realtors named Music City a top 10 commercial real estate market in the U.S.

Nashville and the other growth markets are attractive to investors due to greater rent and occupancy growth, according to the JLL study. The JLL report found the average 5-year rent growth across the eight rising star cities was at 37.6%, more than double the national average of 17.8%.

The JLL study, of course, hasn’t accounted for how the markets will respond to the Covid-19 pandemic and companies still following work from home protocols.

JLL studied markets experiencing high population growth, lower cost of living and lower average commute times. Nashville and the other seven markets experienced population growth of at least 10% since 2010 and outpaced the national average of 7.1%. Job recovery in cities on the JLL rising stars list outpaced traditional gateway cities by a 2-to-1 clip.


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