The demand for industrial space in Nashville is surging, and warehouses and distribution centers are vital to our city’s economy. But alongside these massive facilities, a distinct and rapidly growing trend is changing the market: the rise of small-bay or flex warehouse spaces.
These flexible industrial workspaces are perfectly designed to serve the needs of local businesses, e-commerce fulfillment, and specialized trade partners.
At Crain Construction, we’ve seen this trend take shape firsthand. We’ve helped clients plan and build projects that meet today’s needs while staying flexible for the future. As a local contractor with deep roots in Middle Tennessee, we understand how to adapt to the market and how to help our clients do the same.
In this post, we’ll take a closer look at what’s driving demand for flex space and what developers should know if they’re interested in starting a new project.
Nashville’s Continued Need for Small-Bay Flex Spaces
Recent data from CoStar shows that Nashville’s small-bay market—industrial buildings under 50,000 square feet—now accounts for the majority of new leases. Since 2020, this type of building has consistently represented more than half of all industrial leasing activity in the region.
Here are a few standout statistics:
- Small-Bay Dominance: More than 80% of total leasing activity was in buildings smaller than 150,000 square feet.
- High Market Share: 57% of all direct leases in 2023 and 2024 were for buildings under 50,000 square feet.
- Tight Vacancy Rates: Despite high demand, facilities under 50,000 square feet have a lower vacancy rate (4.2%) than the Nashville market as a whole (5.9%).
Even with all this demand, smaller industrial facilities are still hard to find. At the time this article is being published, there is only one building between 20,000 and 50,000 square feet under construction across the entire market. That short supply creates a real opportunity for developers who can deliver new, efficient flex spaces.
What Developers Should Know When Planning a Flex Project
Building smaller industrial spaces requires a slightly different approach than a traditional warehouse project. Here are a few things we help our clients think through early in the process:
Plan for Flexibility from the Start
The biggest strength of flex space is right there in the name: it’s flexible. These buildings can work for distribution, light manufacturing, or even office use. Designing with adaptability in mind adds long-term value. That means considering HVAC sizing, power capacity, and loading layouts that could all work for different tenants.
Explore More: We recently highlighted what we’re seeing in our article on The Amenities that Matter in Industrial Construction.
Focus on Construction Efficiency
Speed to market is everything in today’s environment. The sooner a building is ready for occupancy, the quicker it starts generating returns.
We’ve found that early planning, especially around materials, lead times, and permitting, makes a major difference. Using pre-engineered steel systems and simplifying logistics on-site can also help move projects forward faster without sacrificing quality.
Explore More: Learn why Pre-Engineered Metal Buildings Have Become a Game-Changer for Industrial Construction.
Future Proof for Light Manufacturing and Tech
Many small-bay tenants require greater technology integration for light manufacturing or specialized servicing. The building infrastructure must support these specialized uses. Integrating new technologies and staying informed about the latest developments allows us to integrate cutting-edge solutions that keep us and our clients at the forefront of industrial construction.
Explore More: Check out our recent article on Industrial & Warehouse Trends for the Nashville Market.
Work With a Local Partner Who Knows the Market
Permitting, inspections, and utility coordination can look straightforward on paper, but the local permitting process in Nashville can be tricky. Having a team that already knows the right people and procedures goes a long way in keeping a project on track.
At Crain, our relationships with local officials, subcontractors, and trade partners help us flag potential issues before they become problems. It’s one of the benefits of working with a contractor who’s been building in Nashville for over 90 years.
Explore More: Discover Why Partnering with a Local Contractor in Nashville matters more than ever.
Crain Construction: Your Partner in Building for What’s Next
The demand for small-bay industrial construction in Nashville reflects the robust and diversifying local economy. As the market evolves, Crain Construction continues to help our clients maximize the long-term value of their projects and navigate the challenges of industrial construction. We combine local experience, long-standing relationships, and practical problem-solving to deliver projects that make sense for the market today and tomorrow.
If you’re exploring a new industrial project or expansion in the Nashville area, we’d love to talk about how we can help.
