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Memphis Industrial Space Remains in Demand

May 4, 2017

The Memphis-area market for industrial real estate remains strong, having just recorded its 15th consecutive positive quarter in the demand for space, according to a report released Wednesday by CBRE.

"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,'' CBRE's Jacque Beeson said in a release.

In the first three months of 2017, a net of 1.3 million square feet of industrial space was absorbed in the area. That's the area's 15th consecutive quarter of positive net absorption, CBRE reported.

"Luckily, developers are proactively constructing speculative buildings,'' Beeson said. "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.''

Three more industrial buildings were completed in the first quarter this year:  Prologis built 716,080 square feet of build-to-suit space at 8500 Nail Road for an undisclosed tenant; and Hillwood built two speculative buildings totaling about 360,000 square feet in the Hacks Cross Logistics Center. They wer eleased to Kenco and Autoliv.

Sixty percent of the market's 3 million square feet of speculative developments are in the DeSoto County submarket, CBRE reported.

"Luckily, developers are proactively constructing speculative buildings,'' Beeson said. "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.''

Three more industrial buildings were completed in the first quarter this year:  Prologis built 716,080 square feet of build-to-suit space at 8500 Nail Road for an undisclosed tenant; and Hillwood built two speculative buildings totaling about 360,000 square feet in the Hacks Cross Logistics Center. They wer eleased to Kenco and Autoliv.

Sixty percent of the market's 3 million square feet of speculative developments are in the DeSoto County submarket, CBRE reported.

Among industrial buildings under construction are a speculative, 554,040-square-foot building by Panattoni Development at Gateway Global Logistics Center and two speculative warehouses of 582,400 and 301,320 square feet by Core 5 in the new DeSoto Logistics Center in Horn Lake.

The vacancy rate ob Memphis area industrial buildings tracked by CBRE rose one percentage point in the quarter, to 8 percent.

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