Tennessee is home to a number of emerging tech markets, with Nashville showing a 190 basis point decline in vacancy in the second quarter and Knoxville clocking in with a decline of 150 bps, according to an analysis from Moody's Analytics CRE.

The firm's David Caputo and Thomas LaSalvia note that overall, "emerging tech market office vacancy continued their excellent run of form in the second quarter and vastly outperformed established tech markets," with emerging locations showing a decrease of an aggregate 20 basis points in Q2 while established ones increased by 20 bps. The national average increased by 30 points.  And among those emerging markets, cities in the Volunteer State were big standouts.

Nashville in particular "has much of what is needed to compete on the national stage," Caputo and LaSalvia say. The city had some of the best overall office stats in the nation in Q2, with office vacancy decreasing by 190 basis points and asking rents increasing by 0.4%. The region is located in a low-cost-of-living state, and Nashville is "very much on the radar of skilled labor looking to move from more expensive coastal locations, as no state income tax and relatively low single and multifamily home prices continue to be attractive," they write. Diversity is also a strength for the market, as 23% of tech workers in Nashville are people of color (comparatively, San Francisco is only 8%). And the city's healthcare industry generated $84 billion in global revenue, making it a "magnet" to healthcare tech startups.