After a brief slowdown, multifamily development in Downtown Nashville is surging once again—reaffirming the city’s position as one of the most dynamic rental markets in the country.
Following a decline in new construction that began in late 2022, the pace has picked up dramatically in recent quarters. By the start of 2025, more than 4,200 new units had delivered over the previous 12 months—placing Downtown Nashville among the top-performing submarkets nationwide.
What’s more impressive? As of Q1 2025, Downtown Nashville now ranks second in the U.S. for units under construction, trailing only Downtown Miami. Roughly 9,200 units are currently being built, representing a striking 30.3%of the area’s existing multifamily inventory.
This new wave of development follows a two-year cooldown. At the height of activity in late 2022, nearly 12,200 units were under construction. By mid-2024, that number had dropped by nearly 5,000. But momentum returned quickly—over 3,200 units broke ground between Q4 2024 and Q1 2025, propelling Nashville back into the national spotlight.
Still, keeping pace with deliveries hasn’t been easy. Over the last five years, Downtown Nashville’s inventory has doubled, adding 15,700 units. During the same period, net absorption totaled 11,700 units, meaning demand has remained high—but not quite fast enough to absorb everything. As a result, vacancy has increased by more than 400 basis points.
However, a deeper look into vacancy tells a more nuanced story. The headline vacancy rate of 17% includes brand-new buildings that haven’t stabilized yet. When isolating stabilized assets—those open for at least 18 months or with occupancy over 90%—vacancy drops to just 8.6%, suggesting underlying strength in demand for well-positioned product.
Looking ahead, there’s no sign that development is slowing down.
One of the city’s most anticipated projects is about to reshape the skyline: Paramount Tower, a 60-story high-rise by local developer Tony Giarratana, is set to become Tennessee’s tallest building. With 360 apartments, 140 condos, and a 517-space parking garage, the tower recently secured $232 million in construction financing and is set to rise along Church Street.
Meanwhile, over in Germantown, New City Properties is moving forward with Phase Two of the Neuhoff District. The expansion will include 319 apartments, a 234,000-square-foot office tower, and 24,000 square feet of retail. This comes on the heels of the first phase, which already delivered 542 apartments alongside office and retail space.
As demand for walkable urban living grows—and institutional capital continues to target Nashville—the city’s core remains one of the most compelling submarkets in the country.
Source: CoStar (www.costar.com) March 2025
