VOL. 113 | NO. 85 | Wednesday, April 28, 1999
By SUZANNE THOMPSON
surges in first quarter
By SUZANNE THOMPSON
The Daily News
The value of retail construction starts increased more than 50 percent in the first quarter of 1999 compared to the same period 1998.
In the first quarter, 26 permits were filed with a total value of $31.2 million compared to 21 permits totaling $20.24 million filed in the first quarter of 1998, according to building permits filed in the Shelby County Construction Code Enforcement office.
The increased activity in retail construction is the result of several factors, said Curt Grantham, managing director for Trezevant Realty.
"There are a lot of reasons for that. With a good economy, weve got a good level of retail sales in Memphis that are increasing year over year.
"As demands increase for retail products, youve got more retailers either expanding their presence in this market or continuing to see new retailers entering this market," Grantham said.
As new retailers look into the Memphis market, demand rises for additional retail centers, he said.
Several anchor/tenant-driven projects that have long been planned are now underway, said Greg Herman, senior vice president for Weston Co.
"Primary anchor tenants within the market are increasing their presence here, namely Albertsons, have a number of projects underway and those projects have been in planning for well over a year and a lot of them are hitting this year," Herman said.
"There has been good activity within the market."
Grantham predicted demand for small, strip mall shopping centers could increase this year.
"I think youre going to see a little bit of a pick up in small shop space, which we havent seen a lot of in the past two years.
"When I say small shop, I mean shallow bay, 90 to 110 feet deep, able to accommodate the 1,200- to 1,500-square-foot tenant," he said.
Retail employment figures also have shown improvement, said professor David H. Ciscel of the Bureau of Business and Economic Research at the University of Memphis.
"We have an almost 5 percent increase in retail trade employment," he said.
Much of that growth represents hiring in the restaurant service area not in general merchandise stores, Ciscel said.
Retail trade generated 98,700 jobs in February 1998, while it created 103,600 jobs in the first quarter of 1999, an additional 4,900 jobs in the Memphis market.
"Thats a good, healthy increase in employment," Ciscel said.
"Maybe what people are doing is anticipating continued strong growth in this economy and building retail trade space to match it."
However, while the increase may seem encouraging, Ciscel said it could mark the calm before the economic storm.
"My guess is that we are building a considerable amount of redundancy at this time into retail capacity.
"What I mean is that we are building retail space much faster than we are creating consumer spending."
This could translate into slow absorption but not necessarily in areas where high-income consumers reside, he said.
"What youll find is more space opening up in the parts of town where consumers are less well-off, where consumer demand is not as high," he said.
Some areas of the city are likely to feel the impact caused by slack demand more than others, Ciscel said.
"This would continue to spell really difficult times for places like the Mall of Memphis," he said.