VOL. 118 | NO. 166 | Tuesday, September 14, 2004
Downtown Market Study
Study Reveals Downtowns Strengths
Growing population paves way for rapid development
The Daily News
People work, live, eat and play in Downtown Memphis. That fact
is nothing new.
But when the Center City Commission released a Downtown market
study recently conducted by Cushman & Wakefield, a few interesting new tidbits
One such item is the average 5.1 percent annual retail sales
growth since 1998 for the 38103 ZIP code, more than double the 2.2 percent
growth seen in the rest of Shelby County.
Another is the fact that from 2000 to 2004, Downtown saw average
annual population growth of 10.3 percent, compared with 1.1 percent for the
remainder of the Memphis Metropolitan Statistical Area.
Offering a tool. The market
study examines Downtowns retail, residential, office/employment and tourism
markets. The initiative was undertaken to provide a resource for developers,
business owners and others conducting business or exploring business options in
Downtown. But it also will help guide the Center City Commission in future
decisions that affect the Downtown area.
The primary value of the study is that we now have a much
clearer definition of who our customers and constituents are, said Jeff
Sanford, CCC president. We are constantly asked for market information by
developers, potential retailers and those who are considering a move of one
kind or another to Downtown. Now we will have the facts in hand. Theres no
question about its value to developers and to other professionals. As far as
the general public is concerned, it may simply be illuminating.
The Central Business Improvement District is a
6.5-square-mile area that extends from the Mississippi River to Danny Thomas
Boulevard and from Interstate 55 and Crump Boulevard to the Wolf River. It also
encompasses the Medical District, which extends from Danny Thomas to Watkins
Street and from Linden Avenue to Poplar Avenue.
High growth areas. The
study takes a detailed look at Downtowns high-growth areas, namely Mud Island,
the Downtown Core and the South Main District the three neighborhoods where
population growth is occurring at the 10.3 percent clip. The residential
population of the high-growth area is 11,282, compared with 25,142 for the
The South Main District has led all areas in population
growth at a 16.8 percent pace. Mud Island has seen 14.5 percent growth.
One fact uncovered by the study is that 44 percent of people
living in the high-growth area are 44 years of age and older.
I think people tend to think of the growing Downtown residential population as
being made up of younger single people, Sanford said. I think this (Downtown
migration of older residents) can be predicted based on the experience in other
Downtowns around the country that are more mature than ours, because eventually
you get the age range diversity. I didnt know we were already there.
Need for retail. As the areas population continues
to grow the study predicts it will grow to 31,000 by 2009 and to 38,000 by
2014 a need for services to support the trend also will grow. Those services
include grocery stores, something almost 80 percent of Downtown residents
polled in the study said the area needs.
Im willing to go out on a limb and say well have a
Downtown grocery store sometime in the next 12 to 18 months, Sanford said.
But retail is organic. It grows to meet demand, and while we have several
million tourists coming through Downtown every year, 68,000 people working down
here and 12,000 people living in the high-growth areas, I think the demand is
simply not there yet for a Neiman Marcus or a Crate & Barrel. Thats why we
are focusing our retail recruiting efforts on local to regional-scale
Selling the district. Those
efforts include a push next month to bring several local retailers Downtown to
show them the advantages of locating in the area. Some 20 retailers will participate
in the Downtown tour.
Well certainly provide them with copies of this study, and
hopefully from that some of them will recognize a business opportunity for
themselves and their businesses, said Jerome Rubin, business recruitment and
retention coordinator for the CCC.
Luring Metro Memphis retailers to the Downtown market is the
No. 1 priority for Downtown officials looking to enhance the areas retail
While the study presented a good picture and a growing
picture, its still not quite there for a number of the national retailers,
Rubin said. So in my role, what Im focusing on is the local to regional kinds
of retailers. I think the numbers are impressive and present a pretty
compelling case that ought to make them stop and think.
Office space. There
are 68,000 employees in the CBID, and the areas average household income is nearly
$60,000. However, the districts office market is not in great shape. Downtown
has 3.6 million square feet of office space, which is 17.4 percent of the
But the study found the markets occupancy rate to be the
lowest in the city.
The fact of the matter is that while Downtown is a
fast-growing residential area, most of the office development has taken place
elsewhere in the community, Sanford said. If you look around the country at
other markets, other than the largest markets New York, Chicago, L.A.,
Houston, Philadelphia that Downtown office accounts for a rather low percent
of market office space.
But, he said, the market has potential.
I think that will change to some extent, and in fact, were
already seeing some signs of it as Downtown becomes a more popular residential
neighborhood, Sanford said. Some Downtown residents will begin applying
pressure to bring the workplace close to home.