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VOL. 124 | NO. 113 | Thursday, June 11, 2009

Aerotropolis Discussion Planned for Chamber Luncheon

By Eric Smith

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CCIM Member Luncheon
Tuesday, June 16, 11:45 a.m.
Presentation by Jim Covington, vice president of logistics and aerotropolis development for the Greater Memphis Chamber
Call 218-0782 for details and to register

The logistics and distribution industries are closely aligned with commercial real estate, and nowhere is their relationship more apparent than in the realm of an aerotropolis, in which a city’s economy is centered on its airport.

The Greater Memphis Chamber a couple of years ago adopted the name coined by John Kasarda of the University of North Carolina and more recently copyrighted the tagline “Memphis: America’s Aerotropolis. Where Runway, Road, Rail and River Merge.”

Now, local leaders want to take the concept a step further by tying aerotropolis to sectors beyond the obvious ones, such as air cargo shipping.

Jim Covington, vice president of logistics and aerotropolis development for the chamber, will discuss the links between his areas of expertise and commercial real estate when he addresses the local chapter of Certified Commercial Investment Member professionals 11:45 a.m. Tuesday at the Holiday Inn-University of Memphis.

For Covington, the connection between what he’s trying to accomplish with the aerotropolis and what commercial brokers are trying to accomplish when they market and sell airport-area properties are two sides of the same coin.

“Real estate is the keystone of logistics, and of course warehousing and logistics and transportation are the foundation of our whole aerotropolis theme,” Covington said. “If you add those all together, you can’t help but be in the same theater.”

Name recognition

Perhaps one commercial portfolio in town symbolizes this relationship more than any other: a 56,752-square-foot, four-story building at 2990 Airways Blvd. (the first headquarters for FedEx Corp.) and a 22,040-square-foot building at 3120 Directors Row.

Those two properties were renamed Memphis Aerotropolis Center by Harris International Real Estate, a local brokerage firm representing the property owner, which, incidentally, is named Aerotropolis LLC.

The Tempe, Ariz.-based company owns both airport-area buildings and empowered Harris International to perform a rebranding campaign last year to tap into the burgeoning aerotropolis idea.

BRANDING: The building at 2990 Airways Blvd. is part of a commercial portfolio renamed Memphis Aerotropolis Center, a symbol of the union between commercial real estate and the burgeoning aerotropolis concept.  – PHOTO BY ERIC SMITH

The buildings’ owners and broker figured the name would lend some cachet to the properties, showing potential users the benefits of being close to the airport and the FedEx hub, but the union of aerotropolis and commercial real estate goes much deeper than a name.

Larry Jensen, president of Commercial Advisors LLC and chair of corridor development for the chamber’s aerotropolis committee, said commercial brokers are cognizant of how the airport bolsters surrounding property, and how those properties provide a front door for the airport.

“When you look at the airport area as an economic engine for the community, you’ve got to pay attention to what that environment is like,” Jensen said. “We all know that there’s some great things going on over there – Smith & Nephew and Medtronic and Pinnacle and FedEx – those are obviously big, big users of real estate. But then you look around and you’ve got a lot of real estate that’s been allowed to deteriorate. We’ve really got to think about how we improve those corridors.”

Cleaning up blight

Improving those corridors will help spruce up entrance areas into the city’s largest economic generator. A new study released this spring by the University of Memphis estimated that Memphis International Airport pumps $28.6 billion into the region’s economy and provides, directly or indirectly, 34.3 percent – or one in three – local jobs.

That assessment alone makes the improvement of commercial properties – many of them 30 and 40 years old – a crucial component of the airport’s mission.

“If we really think the aerotropolis is going to drive us to a 21st century economy and that the airport is really the centerpiece of that,” Jensen said, “then obviously you’ve got to look at the properties around the airport and say, ‘What do we have to do to improve that so that it is supporting this mission rather than holding it back?’”

One group supporting the mission is the recently formed Memphis Airport Area Development Corp. The group, a joint public and private effort with stakeholders from government and major airport-area corporations, is working to improve the area from Interstate 240 in the north to East Shelby Drive in the south, from rail tracks in the west to airport runways in the east.

Jensen said MAADC’s efforts, coupled with those of the chamber’s Major Roads Committee, will drastically enhance areas like the Brooks Road corridor and the Interstate 240-Airways Boulevard interchange.

“We need to be intentional about what we do to make sure that that’s a very strong and clear statement about who we are as a community when you get off the expressway,” Jensen said.

Covington agreed that the commercial real estate sector will play a key role in how the airport is perceived – but that it can also reap benefits of those efforts as well.

“They’re all very intertwined as it relates to our aerotropolis theme, which is the airport and all of the related industries that are part of those one-in-every-three jobs that are produced,” Covington said. “We want to make it where we’re more efficient at doing development and business development as well.”

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 38 38 20,670
MORTGAGES 45 45 23,790
FORECLOSURE NOTICES 24 24 3,071
BUILDING PERMITS 187 187 42,781
BANKRUPTCIES 57 57 13,237
BUSINESS LICENSES 23 23 6,645
UTILITY CONNECTIONS 30 30 7,819
MARRIAGE LICENSES 27 27 4,670