Memphis’ office real estate landscape is changing, and for three firms, those changes are creating opportunities.
Chamber members and others gather for a ribbon cutting for the new Regus location near Southwind. Regus offers customers “virtual” office space with a receptionist and phone system.
(Photo: Lance Murphey)
Orlando, Fla.-based Parkway Properties Inc. in March completed the sale of its interest in Renaissance Center – a 190,000-square-foot office building at 1715 Aaron Brenner Drive in the Poplar Avenue corridor – to partner Parkway Properties Office Fund LP.
Faison – a Charlotte, N.C.-based partner in the building – assumed full ownership of the Class A asset. CB Richard Ellis Memphis, which was already overseeing leasing for the Renaissance Center, retained leasing assignments and now also works for the new ownership in a property management capacity.
It’s part of CBRE’s addition of 800,000 square feet to its property management portfolio during the first quarter of 2012, due to the addition of management services for Renaissance, Germantown Park and The Pinnacle Center in Southaven.
“There’s a lot of change going on in the market because of transition,” said Mary Sharp, CBRE chief operating officer. “Things like Hertz (Investment Group LLC) buying (the majority of) Parkway’s portfolio and of course the sale of Renaissance, and that always creates opportunities when things happen in the market. Obviously, adding new portfolio means increased volume and opportunity for them, so we’re excited. We’ve got some great new assignments working with great owners.”
In addition to growth of the company’s property management portfolio, the three new assignments have increased the CBRE Memphis employee base by seven new positions.
The addition of the new business has increased the company’s total office property management portfolio to more than 3.5 million square feet. Sharp said a track record of acute attention to quality and cost efficiency has been the driving force behind the growth of CB’s property management clientele.
“Best-of-class management always makes it easier for our leasing team to renew tenants and increase occupancy,” Sharp said. “When a property is well managed, tenants want to stay and enhance the reputation of the building.”
Regus general manager Shawn Karol Sandy, right, with John Duncan, vice president of Member Development for the Greater Memphis Chamber, cuts a ribbon for the new Regus location near Southwind.
(Photo: Lance Murphey)
Meanwhile, Luxembourg-based Regus – the world’s largest providers of flexible workplaces – has increased its local presence. The company added a second location in Highwoods Properties Inc.’s Southwind Office Center, in addition to the executive suits it has occupied at Clark Tower since 2004.
“This is their more modern operation,” said Highwoods director of leasing Tony Argiro. “For Southwind, it’s a great fit. The building design is really more contemporary, kind of refreshing look that we don’t see a lot of here in Memphis.”
To Regus general manager Shawn Karol Sandy, the company’s local growth is a sign of emerging economic opportunities, as the opening reflects the demand for flexible working among businesses in the region.
“If you look at what’s happening globally for so many people, now the question is not where do you work, it’s what do you do,” Sandy said. “People don’t pull up to a building anymore and spend 15 or 20 years there. Markets are volatile, companies move and change, and so Regus is expanding because the way people work is changing.”
Regus celebrated its official grand opening and ribbon cutting Tuesday, May 1, at 8295 Tournament Drive, suite 150, with the Greater Memphis Chamber. Regus provides fully equipped offices, virtual offices, meeting rooms, videoconferencing and administrative teams who can provide support services.
Regus’ scalability allows companies to enter new markets and expand without being locked into long-term, expensive fixed leases. Unlike traditional property agreements, Regus’ terms are flexible – meaning clients dictate the amount of space they occupy and for how long.
“For instance, a criminal attorney just starting out who is Downtown at 201 Poplar for the majority of the month and works out of his home doesn’t really want people knowing his home address,” Sandy said. “So, he has a mailbox account with us, and he uses our business world package, which gives him five days of office time to meet clients in our center.”
Yet another Memphis office market change occurred during the first quarter, with seasoned office broker Ron Riley leaving In-Rel Properties to join Colliers International Management Services as senior vice president of its office division.
Riley’s immediate marketing goals are to leverage the strength of the Colliers International brand in the Memphis market.
“The same entrepreneurial culture, resources and experienced team members that have made Colliers a dominant market player in industrial real estate provide an excellent foundation for doing the same in office,” Riley said. “My experience will allow me to bring an owner’s perspective to the table when structuring strategies and establishing metrics for the management and leasing of properties. We have an established office team in place and a base of great office properties already under management that we can build from.”
Riley said there has been a paradigm shift to do more with less, especially within the office sector, and individuals and corporations alike have adjusted to this new norm.
“Corporations pruned the hedges and right-sized while individuals looked at personal finances and figured out ways to pare back,” Riley said. “The good news is we are seeing positive job growth. The challenge we face, however, is that many companies must first backfill vacant or shadow office space that resulted from right sizing. That means there will be a lag before we see meaningful and sustainable absorption in the office market.”