Real Estate Marketing & Beyond
Memphis class A commercial properties are on track to exceed anything from many pervious years. Class A properties are the top of the class in commercial real estate. Large office buildings and large manufacturing facilities. Of course, it includes many other commercial properties such as strip malls but those mentioned are the major big opportunities. Large malls are no longer considered class A properties.
Some of the new businesses are fairly high technology. For example, Tesla Motors wants to build its first super-charging station for its electric vehicles in Memphis, at the Park Place shopping center. The plan is to build a charging station there that has eight stalls for up to eight vehicles at a time. The Park Place address offers two advantages. It is a relatively short distance from the I-240 exit at Poplar and from the Bill Morris Parkway exit at Ridgeway.
Panoramic view of statue of Ramses at entrance of Pyramid Sports Arena in Memphis, TN
Another high priced commercial example is an East Memphis office and commercial building that sold for $8.6 million, more than doubled what it changed hands for a decade ago. Nashville-based Priam Capital purchased the 60,046-square-foot Grove Park Center at 4515 Poplar from GPCTN Investment Co. LLC.
The 58-year-old building underwent a major renovation in 2009, and is 96 percent occupied with financial, medical, and retail tenants. Smaller medical facilities are becoming booming businesses as baby boomers need frequent but minor treatment on a regular basis.
Unfortunately, much of the office market is not doing as well. The office sector is in recovery mode with few prospects of new occupants. According to Integra research, the Memphis market is in the bottom 10 among cities nationwide in terms of office transactions.
However, a building recently sold from across Poplar Avenue from the future Poplar Commons. The retail center will be anchored by a Nordstrom Rack. Seritage Growth Properties will raze the now-closed Sears store and auto service center to make room for the new retail development.
The large apartment industry in Memphis is very strong. The multifamily sector is expanding, with consistent construction deliveries, stable occupancy, and rent growth. Currently, asking rents range from $1,248 for urban Class A to $645 for suburban Class B product. Rental rate growth averaged 2.4 percent per year between 2010 and 2015.
Memphis super markets are also doing well. The highly desired East Memphis submarket has reached a market equilibrium with Class A properties at 96 percent occupancy and no vacant spaces in excess of 5,000 square feet.
What's happening is prospective users are looking to Class B properties. Landlords are bringing on capital improvements and raising rents to compete with the tightened Class A market. The 385 corridor also is seeing a boost.
Upcoming office projects include 160,000 square feet as part of the TraVure mixed-use development in Germantown. Boyle Investment Co. has announced plans to build a 175,000-square-foot office building in the last remaining lot in Ridgeway Office Park. And Crosstown Concourse in Midtown will bear 620,000 square feet when it opens in 2017.
There is of course much more going on in the Memphis commercial market but those are some of the highlights.
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Author bio: Brian Kline has been investing in real estate for more than 35 years and writing about real estate investing for 10 years. He also draws upon 30 plus years of business experience including 12 years as a manager at Boeing Aircraft Company. Brian currently lives at Lake Cushman, Washington. A vacation destination, a few short miles from a national forest. With the Pacific Ocean a couple of miles in the opposite direction.
