VOL. 131 | NO. 221 | Friday, November 4, 2016
Memphis Real Estate Sectors All Show Positive Absorption
Vacancy in the Memphis MSA industrial market has hit a five-year low as 3.5 million square feet of space has been absorbed so far this year, according to the latest MarketView Report from CBRE.
In the third quarter, the Memphis MSA saw 843,827 square feet of positive net absorption, down about 27 percent from the previous quarter.
While absorption was lower quarter to quarter, the low vacancy and construction activity are signs of a very healthy market, according to Jim Mercer, senior vice president with with CBRE’s Industrial & Logistics Services. Low vacancy, along with increasing rental rates, has convinced developers the time is right to build speculative space.
“Marshall County and DeSoto County in Mississippi are submarkets where investors will continue to pursue acquisitions because of the strong absorption and development volume,” Mercer said. “The 5 million square feet under construction in our region is located within Marshall and DeSoto counties. Those elevated numbers can’t help but catch the attention of investors.”
A little more than 5 million square feet of industrial product is currently under construction, according to the CBRE report. The biggest deal of the third quarter was an 800,000-square-foot lease signed by Sears. in the largest deal of the quarter.
In the Memphis MSA office market, net positive absorption totaled 55,200 square feet, the most absorption in a quarter this year, according to CBRE. Year-to-date, the office market has seen 33,184 square feet of net absorption.
Class A office vacancy decreased in the third quarter, leaving less than 1 million square feet of Class A space available, the CBRE report said.
As parking availability dwindles in Memphis and across the country, there is a trend toward exploring more public transit options and developers are having to consider denser parking space plans.
“The commuter culture of Memphis relies heavily on individual vehicles, rather than mass transit, and this has caused parking ratios to become more significant when marketing properties and determining tenant compatibility,” said Ron Kastner, senior vice president with CBRE Advisory & Transaction Services/Investor Leasing. “This is a trend which appears to be here to stay, so some creative solutions will need to develop in order for Memphis to continue having a healthy office market.”
Among the third-quarter highlights for the local office market, Crosstown Concourse is expected to add 552,258 square feet to the Midtown submarket when its transformation is completed and Class A vacancy continues to shrink. In the premier East Memphis office submarket, vacancy is at a low of 3.6 percent.
The Memphis MSA retail market also recorded net positive absorption in the third quarter of 95,184 square feet. Total vacancy in the retail market stood at 11.6 percent at quarter’s end, a five-year low, according to CBRE’s latest MarketView Report.
The overriding trend in the local retail market is construction – estimates show that 745,500 square feet of retail space is under construction and about 473,500 square feet will be delivered by the close of the first quarter 2017.
“The upcoming deliveries of Ikea and Crosstown Concourse are significant for the retail market and the overall economy of the Mid-South,” Parrish Taylor, vice president with CBRE’s Retail Investor and Occupier Services, said. “The opening of these developments, as well as the other recent projects like Bass Pro Shops at the Pyramid and Tanger Outlets in Southaven, continue revitalizing the market.”
Collierville is probably the hottest submarket, outpacing the East and Germantown submarkets – combined – in leasing activity in the third quarter, the report notes.
– Daily News staff
Memphis Women’s Basketball Has New Attendance Initiative
The University of Memphis athletic department has a new initiative designed to increase the number of families that attend women’s basketball games.
Children 12 and younger will receive free admission to all Memphis Tigers home women’s basketball games.
All other women’s basketball pricing will remain the same, with season tickets priced at $60 for general admission and $100 for reserved. Single-game tickets are $5 general admission and $10 for reserved.
“Our goal is to increase attendance, enhance the game-day atmosphere and provide affordable family entertainment,” U of M athletic director Tom Bowen said in a statement.
The women’s basketball team has 17 home games in 2016-17, highlighted with Big 12 opponent Kansas, as well as perennial powers Vanderbilt and Louisiana Tech, plus a full slate of conference games. For tickets, visit the athletic ticket office or call 901-678-2331.
– Don Wade
GTx Reports $6.9 Million Loss in Third Quarter
Memphis-based biopharmaceutical company GTx Inc. swung to a loss for the third quarter compared to the year-ago period, the company reported this week.
GTx posted a net loss of $6.9 million for the quarter ended Sept. 30, compared to net income of $34.9 million for the same period in 2015. Research and development expenses for the quarter were $4.6 million compared to $3.8 million for the same period in 2015, and general and administrative expenses were $2.3 million for the quarter, up from $2 million in Q3 2015.
In October, the company completed a registered direct offering of 17.3 million shares of its common stock that brought in almost $14 million in net proceeds.
Investors in the offering consisted of some existing shareholders, including Pitt Hyde, its largest shareholder and lead director of the board of directors; Robert Wills, the board’s executive chairman; and Marc Hanover, CEO and board member.
– Andy Meek