VOL. 128 | NO. 229 | Friday, November 22, 2013
Inked
Amos Maki
Leases Push Renaissance Center Near Capacity
By Amos Maki
The Renaissance Center office building in East Memphis should be near capacity early next year, following a series of recent lease signings.
Financial Federal signed a lease on Tuesday, Nov. 20, to occupy 27,000 square feet on the first and second floors of the Renaissance Center, 1715 Aaron Brenner Drive. In addition to the new location, the growing financial firm will have signage atop the East Memphis office building along Poplar Avenue east of Interstate 240.
“I think the real estate implications are tremendous, given the amount of recent activity we’ve seen along the Poplar corridor,” said Ron Kastner of CB Richard Ellis Memphis.
Kastner represented landlord FCA Fund Memphis I LLC in the transaction. Wyatt Aiken and Jacob Biddle of Cushman & Wakefield/Commercial Advisors represented Financial Federal.
Aiken said Financial Federal timed the lease signing perfectly.
“This office lease in one of the top Class A-plus buildings in Memphis may well be the tipping point for rents in that submarket,” Aiken said. “Financial Federal’s timing was impeccable.”
In addition to Financial Federal, Mid South Title is currently negotiating a lease to occupy around 3,400 square feet at Renaissance Center.
Financial Federal and Mid South Title will join Legacy Wealth Management, Reliant Investment Management and LPS Integration, which all recently signed leases at Renaissance Center.
“After this flurry, Renaissance Center will be 95 percent occupied after being in the mid-low 80s for the past five years,” Kastner said.
Activity along the Poplar corridor between I-240 and Kirby Parkway, which has become the city’s central business district, has gained momentum over the last few moths, a trend likely to continue into 2014.
“The Class A sector along Poplar is now at 10 percent vacancy, and within that set, the top six ‘Class A-plus’ (buildings) are less than 6 percent vacant on average,” Kastner said. “This scarcity of available space in this submarket is leading to increased rental rates and longer term leases. We expect this trend to continue until a new building is built, which could take in excess of 18 more months until that space is on the market.”
Rising rental rates fueled by the scarcity of prime East Memphis office space, particularly in blocks larger than 8,000 square feet, could lead more and more tenants to look for better deals in new space.
“Over the last five years, landlords had not been pushing renewal rental rates and were happy just getting what they could get, so not too many tenants decided to move during that period,” Kastner said. “Now that’s changed, and stronger demand is allowing landlords to increase rates both on renewals and on advertised rates.”
Meanwhile, another local bank could soon set up shop in East Memphis. Brokers have been aggressively seeking a financial services firm to lease around 8,000 square feet at 5350 Poplar, the office building on Poplar near Estate Drive known as the SunTrust Bank Building. In April, SunTrust closed it bank branch there after previously relocating other bank functions there to other locations.
Another East Memphis office building, the soaring Clark Tower on Poplar, has seen leasing activity.
Swain Wealth Partners at Raymond James recently renewed its lease for 1,888 square feet at Clark Tower. Brand Cook and Phil Dagastino Jr. with Cushman & Wakefield/Commercial Advisors represented the landlord, In-Rel Properties.
CoWorx Staffing Service recently signed a new lease for 1,787 square feet at Clark Tower. Dede Malmo with MalmoMemphis Real Estate Inc. represented CoWorx, while Cook and Dagastino represented In-Rel.
In other leasing news, Care Spot Express Healthcare has leased 3,284 square feet in the Commons of Dexter Lakes at 1645 N. Germantown Parkway. Andrew Phillips and Ed Thomas of Colliers International Memphis represented the landlord, 1645 North Germantown Holdings LLC, while John Reed with The Shopping Center Group LLC represented the tenant.