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VOL. 127 | NO. 207 | Tuesday, October 23, 2012

Seminar To Tackle Commercial Conditions

By Sarah Baker

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While many commercial real estate professionals would like to forget about 2011 altogether, celebrating increases in 2012 is necessary for morale.

Shelby County experienced the most second-quarter sales this year since the second quarter of 2008, and the highest quarterly sales revenue since the second quarter of 2007.

Through August, commercial sales are up 2 percent and average sales prices are up 54 percent to $1.62 million, according to real estate information company Chandler Reports, www.chandlerreports.com. What’s more, year-to-date commercial foreclosures are down 16 percent and the average foreclosure amount is down 50 percent.

Real estate professionals will take a look at pressing issues like these when The Daily News hosts its second annual Commercial Real Estate Review & Forecast Thursday, Nov. 1.

The seminar – sponsored by Magna Bank & Evans Petree PC – will be held at 3:30 p.m. at the Memphis Brooks Museum of Art Auditorium, 1934 Poplar Ave.

Panelists and their topics are Shawn Massey, The Shopping Center Group (retail); Kelly Truitt, CB Richard Ellis Memphis (office); Andy Cates, Colliers International (industrial); and Jimmy Ringel, Makowsky Ringel Greenberg (multifamily).

Massey will brief the audience on retail developments from Overton Square to new boutiques to the market, such as Lululemon Athletica Inc. and The Orvis Co. He’ll also touch on consumer trends and how it affects bricks and mortar real estate.

The Daily News’ Commercial Real Estate Seminar

Thursday, Nov. 1 at 3:30 p.m.

Memphis Brooks Museum of Art Auditorium, 1934 Poplar Ave.

$25 to register at www.memphisdailynews.com/seminar

“Memphis has got income for people to shop,” Massey said. “People are recognizing that in certain categories, we’re under retailed.”

In addition, Massey will tackle restaurants that have committed to the area in recent times, such as Taziki’s, Huddle House and Panda Express, and how “Memphis has become a foodie city.”

“The reason food is expanding is they can’t sell it over the Internet,” Massey said.

He’ll also zero in on “hot markets,” like Poplar Avenue and Mendenhall Road, Southaven, Union Avenue, and Hacks Cross and Winchester roads. Overall, Massey said, “it’s still a tenant market where the tenants are driving deals.”

Activity in the industrial sector has been constructive as well. In fact, industrial sales have shown the most improvement of all commercial real estate property types, with Chandler Reports registering a 40 percent increase through August compared to the same period last year.

“I get an inquiry about once every two days for somebody wanting a new survey of Memphis for industrial space,” Cates said. “Sometimes you go at least a month without getting those kinds of calls. It’s definitely showing up.”

Cates will give a quick overview of the market, including its size and how local brokers define it, in order to “really help people understand how industrial Memphis really is.” Then he’ll talk about “some of the exciting stuff that is happening,” like what different values for Class A, B and C properties are selling for.

“Using Prologis as an example, they had a bunch of B space, they sold a bunch of it to Exeter (Property Group), and they don’t have any vacancy right now – they’re at 100 percent occupied,” Cates said. “The B market has definitely picked up and been strong for some owners.”

Meanwhile, Truitt will be discussing the office market from a national perspective, with a comparison of Memphis to some peer cities. He’ll also tackle current conditions and “may go out on a limb and make a projection or two.”

Truitt said there hasn’t been any considerable movement in the office market because there hasn’t been a significant amount of white collar job growth. Also affecting the sector is the fate of two mainstay Memphis companies.

Morgan Keegan & Co. Inc., in light of its acquisition by St. Petersburg, Fla.-based Raymond James Financial Inc. earlier this year, is still working through its consolidation and “redundant” positions. And following Pinnacle Airlines Corp.’s filing for bankruptcy reorganization, the Memphis-based airline is considering whether to move its headquarters to Minneapolis.

Both situations have resulted in noteworthy cutbacks to high-wage local jobs and are concerning moving forward.

“It seems like many people are in a little bit of a wait and see type pattern, both with the elections and then maybe what will transpire with some of the merger and acquisition activity in the Memphis area,” Truitt said.

Conversely, the local multifamily market appears to be staging a healthy comeback as pending uncertainty surrounds the housing market. Multifamily had the most second-quarter sales revenue with 26 sales totaling $202 million.

Apartments made up all of the multifamily sales and had the highest revenue by property group. Ringel will further discuss the state of the multifamily occupancy, retention and rental rates.

“We foresee a paradigm shift in rental housing as a result of economic and demographic trends that will likely contribute to the growth in this industry for years to come,” Ringel told The Daily News in August.

The program will begin at 3:30 p.m. and will last about 90 minutes, including a question-and-answer session that will follow the presentations allowing for audience discussions with the presenters.

At the conclusion of the seminar, a wine-and-cheese mixer will be held in the museum lobby for additional conversation and networking. The cost is $25.

To register, visit www.memphisdailynews.com/seminar. Inquiries can be directed to The Daily News’ marketing manager Donna Waggener, at 528-8122 or dwaggener@memphisdailynews.com.

Chandler Reports is a division of The Daily News Publishing Co. Inc.

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PROPERTY SALES 86 374 7,749
MORTGAGES 89 414 9,199
BUILDING PERMITS 197 1,007 16,607
BANKRUPTCIES 45 279 5,406

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