Year Begins With High Positive Net Absorption, Construction Deliveries and Speculative Development Announcements
CBRE Research has released Q1 2017 data on the industrial commercial real estate market in the Memphis area. The market closed Q1 2017 with 1.3 million sq. ft. of positive net absorption and a total vacancy rate of 8%. Developer activity and interest in the Mid-South continues, especially as the market has closed with positive net absorption for 15 consecutive quarters.
“Memphis has significant market activity and low available inventory, which means developers would benefit from capitalizing on the lack of supply in order to keep business in Memphis,” said Jacque Beeson, Associate with the Industrial & Logistics team. “Luckily, developers are proactively constructing speculative buildings. Big box companies want to be in the Mid-South because of favorable incentives, quality of Class A spaces, cost effective lease rates, and the accessibility to the river, rail, roads and air connectivity Memphis offers. And we want them here, too."
Three construction projects were delivered in the Desoto County submarket in Q1 2017. Prologis delivered a build-to-suit warehouse, 716,080 sq. ft. at 8500 Nail Rd., to an undisclosed tenant, and Hillwood delivered two speculative buildings, totaling approximately 360,000 sq. ft., in Hacks Cross Logistics Center. Hillwood’s Buildings 2 and 3 were leased upon completion to Kenco and Autoliv. Of the market’s 3 million sq. ft. of speculative developments, 60% are within the Desoto County submarket.
As for developments under construction, Panattoni Development announced another speculative building for Gateway Global Logistics Center. Developers have broken ground on Building V, 554,040 sq. ft., and plan to deliver the building in the second half of 2017. In Desoto County, developer Core 5 began construction on two speculative warehouses in Desoto 55 Logistics Center in Horn Lake, to be 582,400 sq. ft. and 301,320 sq. ft.
The following are highlights of the report.
- Prologis’ 716,080 sq. ft. build-to-suit warehouse was completed.
- Hillwood’s Hacks Cross Logistics Center Buildings 2 and 3 were completed.
- The market experienced positive net absorption of 1.3 million sq. ft., and 1 million sq. ft. of new space was delivered.
- Total vacancy rose 100 basis points to 8%, a return to mid-2016 vacancy levels.
For more information, click here for Q1 2017 Memphis Industrial MarketView.
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