On the market: Here’s how Nashville's sublease office space breaks down

Greater Nashville has a record 2.3 million square feet of sublease space in the office market, according to a report from brokerage firm Avison Young. Over half of the available space falls in Class A buildings.

That means the city has almost as much sublease space available as it does new construction underway. At the end of the last quarter, Greater Nashville had 2.66 million square feet of office space under construction, according to Avison Young.

The trend is largely fueled by remote and hybrid work post-Covid. Companies find that as their employees demand work-from-home accommodations, they don’t need as much office space. This leads to more square footage on the sublease market, which gives other firms an opportunity to snag top-tier leases at a discounted rate.

Tire supplier Bridgestone Americas Inc. is one example. The Nashville-based company recently put over 160,000 square feet of its 506,000-square-foot downtown office tower on the sublease market, citing hybrid work’s real estate impact.

Bridgestone has about 15 years remaining on its tower lease with Highwoods and has hired brokerage firm CBRE Group Inc. to market the space.

Another big example is Asurion. The company will market three floors — 90,000 square feet — of its new $285 million Gulch headquarters for other companies to potentially occupy, according to an internal email the company sent to employees. The tech company attributed the move to hybrid work.

Total office vacancy is hovering around 18.9%, and sublease space makes up about 20.9% of that figure —  surpassing previous highs recorded during the Great Recession and dot-com recession, according to Avison Young. The good news is that the city’s high vacancy rate isn’t being driven by tenants defaulting on their rent, as was the case during the Great Recession, according to Cushman & Wakefield research.

Here’s how Music City’s office space breaks down: