The Memphis apartment market is expected to record mixed performance this year, due to a spike in new inventory and decelerating employment growth. On the demand side, weakness in the housing market is keeping many individuals within the renter pool, boosting retention rates and supporting a modest uptick in tenant demand. Foreclosure activity rose 15 percent in the first quarter, when compared to the same period one year earlier, and is expected to continue this year as more adjustable-rate mortgages reset. Subsequently, apartment demand for Class B and Class C properties should pick up in this year, causing vacancy for the metro’s affordable rentals to improve. On the supply side, development activity is accelerating after 5 years of below-average additions to stock. By year-end, developers are expected to boost inventory by 1.1 percent, or nearly double the 5-year average, pushing vacancy higher while moderating rent gains. Builders have brought approximately 175 new apartment units to the Memphis market during the past 12 months, representing a modest 0.2 percent increase in inventory. One year ago, deliveries had totaled approximately 210 units. Development activity is picking up, as builders have roughly 1,100 units underway in the metro area. As for significant developments, …
Tennessee
What area is your expertise? • I specialize in commercial sales and leasing in the Cool Springs submarket just south of Nashville. What trends do you see presently in office development in your area? • There continues to be speculative development in and around Cool Springs on the office side. We’re also seeing the emergence of more and more mixed-use development in the area. Specifically Boyle Investment Company’s Meridian development and Southern Land Company’s McEwen Place are creating a new dynamic in Cool Springs. Class A office condo developments are also seeing a resurgence. Caden Holdings, The Stauffer Company and Alliant Commercial each have new buildings underway that will allow smaller prospective office buyers to purchase condos in the 3,000-square-foot range and up. Who are the active office developers in your area? • Crescent Resources, Boyle Investment Co., Duke Realty and Highwoods Properties have the biggest presence in Cool Springs. Please name one or two significant office developments in your area. What impact will these projects have on the market? • The mixed-use developments mentioned earlier will allow for a better commingling of living, working and playing. The new headquarters for Nissan North America and Healthways are well underway. These …
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