VOL. 114 | NO. 15 | Tuesday, January 25, 2000
By SUZANNE THOMPSON
Retail construction slows in 1999
experts predict continued decline
By SUZANNE THOMPSON
The Daily News
The number of retail construction starts filed during 1999 dropped 9.7 percent from the number of permits filed during 1998, and some industry analysts expect the slide to continue this year.
During 1999, 93 permits were filed, compared to 103 filed in 1998, according to records filed with Shelby County Construction Code Enforcement and compiled by the Daily News Online.
The dollar value of construction dropped 15.5 percent, from $133 million in 1998, to $112.4 million in 1999.
Trip Trezevant, owner of Trezevant Enterprises, attributed the decline to several factors.
"We have overbuilt the hotel industry in most areas of Shelby County," he said. "Interest rates have gone up 1 or 2 percent, which would slow down a lot of development. I look for a slow down for year 2000 even more so than 99."
The lack of available property facing Germantown Parkway, coupled with increased in-fill in the city, also are factors contributing to the slowdown, he said.
Michael Lightman, Sr., owner of Lightman Realty Co., agreed the interest rate hike was partly responsible for the dip in retail construction starts.
"Interest rates might have some effect on it. The Fed is trying to slow things down a little bit and Im sure that will slow things down some, which might be a healthy thing," he said.
Another reason for the decline may be the influx of national retail chains, Lightman said.
"I think that the pent-up demand for retailers the big box users was satisfied in 97 and 98. A lot of the ones that have been looking at Memphis your Best Buys, your Office Depots, Home Depots, some of the grocery stores, probably have satisfied their demand temporarily. It doesnt just stay full blast all the time," he said.
Trezevant predicts Collierville and DeSoto County will be the hottest areas for growth this year.
Lightman said there are other local areas ripe for retail development, as well.
"The Wolfchase area remains hot. (U.S.) Highway 64 maybe even east of the Interstate may start picking up. I think between Riverdale and Hacks Cross is going to be very active," he said.
Trammell Crow Co. has plans for a 70,000 square-foot retail center on Germantown Parkway south of Wolfchase Galleria, in its Parkway Place development, said Trammell Crow managing director Curt Grantham.
He rated the Wolfchase area as the No. 1 area for development this year, with the Nonconnah Parkway corridor following closely behind.
Grantham said he believes retail development this year will be driven by retailers other than big boxers.
"Most activity next year will be driven by grocery-anchored centers," he said.