For years, much of Memphis’ retail growth has been concentrated in the suburbs. More recently, however, redevelopment activity in East Memphis, Midtown and Downtown has created a new source of investment and retail demand.
While suburban growth remains steady, some of the market’s most notable projects are occurring in established areas where older properties are being redeveloped and repositioned for new uses. As a result, some of the market’s most significant activity is occurring within existing commercial corridors rather than through large-scale retail expansion.
Memphis remains a healthy retail market, although growth has become more measured than it was a few years ago. Retail vacancy is forecast to reach 5 percent in 2026, while average asking rents are projected to climb to $14.20 per square foot.
New supply also remains relatively limited. After more than 400,000 square feet of retail space was delivered annually in both 2023 and 2024, just 250,000 square feet is forecast to come on line in 2026. Limited new supply has helped support rent growth across existing shopping centers.
Some of the strongest examples of this trend can be found in Midtown, Downtown and East Memphis, where older sites are being transformed into new mixed-use developments. In Midtown, The Cooper is replacing several older industrial businesses with a 275-unit residential and commercial project. Downtown, the future Regional One Hospital campus will replace the former headquarters for The Commercial Appeal newspaper. In East Memphis, the Oak Court Mall site is being redeveloped into a mixed-use project that will include residential units, townhomes, a hotel, park space and commercial uses.
Each project represents a different type of redevelopment, but together they demonstrate where development activity is occurring in Memphis today. As these projects move forward, they are expected to introduce additional residents, jobs and commercial activity into established neighborhoods, creating new opportunities for nearby retailers and restaurants.
Investor interest remains healthy, even as transaction activity has been limited by a shortage of sellers. Many investors continue to target stable, income-producing retail assets, but there is also significant demand from buyers pursuing value-add opportunities. Properties that can be repositioned or re-tenanted continue to attract attention.
Retail pricing has remained relatively stable as well, with the average sale price reaching $296 per square foot in the trailing 12 months through the first quarter. Average cap rates have remained in the low-7 percent range, reflecting continued investor appetite for retail properties in the market.
Rent growth is being supported by many of the same factors. Construction costs remain elevated, and the limited amount of new shopping center development has increased the value of existing retail space. For owners of well-located shopping centers, the lack of new supply has helped support rental rates even as vacancy has moved modestly higher across the metro. Existing retail corridors have generally benefited from the limited amount of new supply coming to market.
While redevelopment activity is reshaping several parts of the city, investor demand remains a consistent theme across the market. Many buyers continue to compete for a limited number of available opportunities, particularly properties with strong locations or value-add potential. That demand has helped support pricing and reinforces the continued appeal of Memphis as a retail investment market.
— Mickey Davis, director investments, Marcus & Millichap. This article was originally published in the July 2026 issue of Southeast Real Estate Business.