Rapid development leaves empty Nashville apartments awaiting renters

Nashville's downtown has seen a surge in development over the past five years, and it has resulted in thousands of new apartment units flooding the rental market at the same time.

Now, many of those rental units sit empty, awaiting renters.

That's according to a Tennessean analysis of Zillow listings conducted in June, which showed 1,600 rental apartments now available within Nashville's inner highway loop — where Interstates 24, 65 and 40 converge.

As the surge in development continues to soften rental rates in Nashville, how will rents and future development be affected?

How many apartment units were built during Nashville's development boom?

According to a recent analysis by RentCafe, Nashville's downtown residential area added nearly 8,900 apartment units since 2020, ranking Nashville eighth out of the 50 largest U.S. cities for total downtown apartment construction between 2020 and 2024.

"Nashville's economy is strong, it provides many job opportunities in industries like tech and health care," said RentCafe researcher Alexandra Both. "There are also high-profile employers in Nashville like Oracle, Amazon. This attracts young professionals relocating from other states, like New York and California, or even other countries."

The development boom occurred in non-residential areas of the city like the former railyards and business districts of the downtown area.

How many apartment units are now available in Nashville?

According to a Tennessean analysis of Zillow listings in early June, there are at least 1,600 available rental units within downtown Nashville's inner highway loop. There were 2,700 more rental units available within the Interstate 440 loop to the south.

In MetroCenter alone, there are around 540 units being advertised for rent.

Some brand new apartment buildings have hundreds of units available under one roof.

"Construction and supply peaked in Nashville in 2024, hands down," said Joel Sanders, founder and CEO of Apartment Insiders, based in Nashville. "We are on that downhill slope."

Despite the number of currently vacant apartments, the absorption rate in Nashville remains strong, according to Sanders.

"Nashville is very much a you-build-it-and-they-will-come city," Sanders said.

Are Nashville rents going down?

Nashville rents have softened since the apartment development boom, especially last year, when three months of free rent was a relatively common incentive deal being advertised.

But as development slows down once again, rents could start climbing again about two to three years from now, according to Sanders.

"What is probably going to happen, based on what we can tell, is rents are going to go up," Sanders said. "I also don't predict construction costs or interest rates going down anytime soon."

This article originally appeared on Nashville Tennessean: Nashville development boom leaves thousands of empty rentals