Memphis continued its record-setting ways throughout 2018. Absorption was higher than 2017 by over 735,000 square feet for a total of 6.7 million square feet. Overall vacancy rates fell below 6 percent for the first time in recent history. As of Jan. 1, 2019, vacancy rates were at 5.8 percent. One would think this would come at the expense of rental rates, however, rental rates stayed constant at $2.77 per square foot until year-end. This represents a slight increase of 10 cents per square foot over 2017. With an industrial market exceeding 270 million square feet, it’s no wonder how Memphis got its name as “America’s Distribution Center.” Memphis International Airport is the second largest cargo airport in the world, home to 400 trucking companies, the third busiest trucking corridor (Interstate 40 to Little Rock), one of only four cities to be served by five long-haul Class 1 rail systems, the fourth largest inland port and the second largest stillwater port. Home to the FedEx World Hub, as well as UPS and USPS hubs all operating 24 hours a day, 365 days a week, Memphis provides the most cost-effective distribution and logistics operations in the country. While Memphis has been …
In January, during his annual State of the State address, Memphis Mayor Jim Strickland emphatically exclaimed, “Memphis has momentum!” Memphis, the biggest little town in America, is definitely in a period of unparalleled economic growth. Memphis has momentum on its side with the $10 billion, nine-year expansion at St. Jude Hospital and an infusion of hospitality that includes a new convention center and no fewer than 17 new hotels, which all started, will start or will be completed in downtown in 2019. Additionally, $4 billion in building permits have been awarded in the last few months with another $5 billion planned by developers. Most importantly, the highly anticipated Memphis 3.0 plan — the first comprehensive growth strategy for the city in 30 years — will ensure growth is sustained for many years to come. What are others saying about Memphis? Many respected publications are putting Memphis back on the map. Food & Wine put Memphis in its top 50 places to go and eat in 2019. Frommer’s Travel named the city the best place to visit in 2019. TravelChannel.com lists Memphis as the hottest Southern destination in 2019. And Forbes stakes Memphis as the best bet for real estate investments. …
GERMANTOWN, TENN. — Continental Realty Advisors (CRA) has sold The Preserve at Southwind Apartments, a 306-unit multifamily complex built in 2000 in Germantown, for $35.9 million. Denver-based CRA bought The Preserve in December 2014 and renovated the clubhouse, leasing center, fitness center and swimming pool area. The asset is situated one mile south of the FedEx Express World Headquarters and 21 miles southwest of downtown Memphis. Blake Pera of Newmark Knight Frank represented the seller in the transaction. The buyer was not disclosed.
Memphis is currently undergoing an evolution that has been experienced by many markets in the region: increasing activity among office tenants moving with more confidence. In Memphis, this is manifesting itself in a flight to quality among office-using companies. While East Memphis is considered the most attractive office submarket in the region, the Downtown submarket has experienced significant leasing over the past 24 months and is gaining momentum. This focus on urban office is another trend that is just now hitting the Memphis market. Memphis’ most significant win in 2018 was Indigo Ag’s announcement that it will relocate its North American headquarters for its commercial operations to downtown Memphis. Indigo Ag, a high-tech agriculture firm whose primary service includes coating seeds with protective microbes, will expand its current downtown Memphis office at Toyota Center. With the expansion, the firm intends to increase its workforce by 700 corporate employees and invest $6.6 million over the next three years. Upon its completion, Indigo Ag will occupy 103,500 square feet in the eight-story Toyota Center, which will be renamed “Indigo Plaza.” The move represents the most recent and significant corporate investment in the Downtown submarket, following the relocation of ServiceMaster and its 1,200 …
MURFREESBORO, TENN. — KeyBank Real Estate Capital has provided a $79.9 million refinancing loan for LC Murfreesboro, a 580-unit apartment community in Murfreesboro, about 34 miles southwest of Nashville. The Freddie Mac loan features a fixed interest rate with an 11-year term, five years of interest-only payments and a 30-year amortization schedule. Built in phases between 2015 and 2018, LC Murfreesboro comprises19 three-story buildings offering one- and two-bedroom floor plans. Amenities include green spaces, a fitness center and a swimming pool. Jon Reible of KeyBank originated the loan on behalf of the borrower, Columbus, Ohio-based Lifestyle Communities to refinance existing debt.
MEMPHIS, TENN. — Woodyard Realty Corp. has brokered the $13.5 million sale of Phase II of 266 Lofts in downtown Memphis. Pittsburgh-based Alpha Capital Partners purchased the second phase, which was fully occupied at the time of sale. The seller, VS Developments, delivered the 74-unit second phase in late 2018 and the 77-unit first phase in 2017. Lea Heilig of Woodyard Realty represented the seller and procured the buyer. Phase II also added two street-level retail spaces leased to a restaurant/bar and a boutique salon. Situated in the South Main Arts district in Memphis, the three-story multifamily community features units ranging from 790 to 1,300 square feet and amenities such as a fitness center, pool and a poolside restaurant that delivers room-service meals to residents.
NASHVILLE, TENN. — Multifamily investment firm The Sterling Group has sold Hampton Chase Apartments, a 202-unit multifamily community located approximately 10 miles from downtown Nashville. The buyer was Los Angeles-based Lion Real Estate Group, which acquired the asset for $20.7 million. Prior to the sale, Sterling Group renovated 137 units at the property, which was built in 1974. Communal amenities include two swimming pools, a fitness center, clubhouse, picnic area, firepit, sun deck and a playground. Russ Oldham, Brett Kingman and Steve Massey of CBRE represented The Sterling Group in the deal.
NASHVILLE, TENN. — Bearded Iris Brewery and Barista Parlor, both local to Nashville, have signed leases to join the tenant lineup at Sylvan Supply in Nashville. Atlanta-based Third & Urban and Chevy Chase, Md.-based FCP are renovating the 96-year-old mill on Charlotte Avenue into a six-building, 130,700-square-foot mixed-use development that will feature office space, outdoor areas and 32,850 square feet of retail and dining space. Bearded Iris Brewery, named for Tennessee’s state flower, will brew experiential batches exclusive to the location, as well as its full portfolio of beer. Barista Parlor will offer coffee and breakfast. Sylvan Supply is expected to open this year and both Iris Bearded Brewery and Barista Parlor are expected to move in early next year. Elliott Kyle of Equitable Property Co. represented the developers in the lease transactions.
NASHVILLE, TENN. — A partnership between Boston-based developer The Congress Group Inc. and AECOM Capital will develop the Four Seasons Hotel and Private Residences, a $360 million project in Nashville. The property will comprise 232 hotel rooms, an undisclosed number of for-sale residential units, 10,000 square feet of retail space and a 368-space parking garage. Construction is slated to begin sometime during the second quarter of 2019. Located at 151 First Ave. South, the hotel will overlook the Cumberland River and offer immediate proximity to the Broadway entertainment district, as well as Nissan Stadium, home of the NFL’s Tennessee Titans. In addition, the hubs of four of the five largest employers in Nashville — including Pinnacle Financial Partners and Bridgestone — are located in close proximity to the hotel. Riaz Cassum, Danny Kaufman, Robyn King, Andrew Gray and Mary Dooley of HFF worked on behalf of the development team to arrange $360 million in debt and equity financing for the project. The lender and loan terms were not disclosed. “This transaction garnered strong interest from both lenders and equity investors via the strength of the sponsors and their vision for a world-class development on the best site in Nashville,” says …
The industrial real estate sector is currently undergoing one of the greatest expansionary periods in the nation’s history. Record development, all-time high occupancy and rental rates and strong leasing activity have been a boon to the U.S. industrial market in the last two years. In addition to these fundamental elements that make up a strong sector, there has been a demand driver that has transformed the industrial market more now than ever: e-commerce. Amazon is now the largest industrial occupier post-recession, which is forcing retailers and wholesalers to modernize their supply chain to keep up. E-commerce is not a new phenomenon, but it is becoming increasingly competitive, and is expected to grow another 55 percent in the next four years, according to Colliers International research. E-commerce has reshaped the way people purchase goods, resulting in new increased requirements on the transportation of products. As such, organizations are needing to reevaluate their supply chain strategies and transportation costs, and demand for smaller fulfillment centers closer to the urban population is exploding. This challenge around the “last-mile delivery” is altering the distribution and logistics sectors. IMS Worldwide defines the last mile as the “last point of distribution or sortation to the final …