Memphis, TN, has done everything it can to attract tenants to its commercial real estate market. Now, when the recession is over, the entire product presented in the city can not simply be ignored. Expanding and robust multifamily, office, and retail sectors experience favorable absorption rates due to several essential factors - optimistic economic outlook, the growth of housing, jobs, consumers’ confidence in the area, decrease of unemployment, etc. Transportation, healthcare, trading, and hospitality industries continue to drive the job market in the city, and, thus, express the highest levels of demand for commercial property in Memphis. Vacancy rates experience a slow, yet a steady decrease, nowadays registering the following numbers: 5,5% in the industrial sector and slightly more than 14% of the office one. Despite the recent plateau, developers were still optimistic about Memphis’s commercial real estate market’s ability to absorb new supply. Eight projects totaling 1.4 million square feet of offices have been recently pitched in the city. It represented a historical high for the market. Significantly, five of the proposed projects were slated for the Downtown area, while the remainder were slated for the East submarket. The industrial submarket, being probably the best one in the entire stock in the city, has also gained momentum. It showed more than 2,3 million square feet of total direct absorption and nearly 9 million sq.ft. is still under construction. The majority of this space accounts for speculative developments, while the other part goes to the so-called built-to-suit units. The growing popularity of e-commerce has its impact on both - the retail and industrial sectors. More and more overnight delivery users state that they don’t require Class A specifications. With the rise of demand for Class B solutions, the rental rates for these types of premises grew.
