The lack of construction combines with what Darwin Pankey, president of Grubb & Ellis/Centennial, calls the "pain" of "steep and widespread concessions," to keep the market in limbo.
"The rental rate and occupancy level is fairly strong compared with other Southern cities," he says in the report. The study, however, reveals that 95% of properties are offering concessions that range from one-half month to two months of free rent.
Seven properties with a total of 839 apartments are under construction, the lowest level since 1994, Pankey reports. During the 1990s, new construction in the Nashville MSA averaged about 2,500 units a year.
The occupancy rate has fluctuated little, between 92.5% and 93.5%, since year-end 2000. The average monthly rent was $711 in first quarter 2001. It dropped last year to $703 and has climbed back to an average $711 per unit.
The current unemployment rate is 4.2%. Pankey says in the report positive job growth, combined with the area's low levels of multifamily construction, "provide a foundation for strength going forward."
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