Feb. 09--Industrial, retail and office spaces around Memphis filled up at a soaring pace in 2015, reports yet another commercial real estate firm.
Office: "The largest amount in more than 10 years.''
Retail: "This is the largest year of construction deliveries since 2000.''
Industrial: "... Makes 2015 the strongest year in more than 15 years.''
Those are snippets from the latest CBRE Memphis Marketview reports on the last quarter of 2015, released Tuesday morning.
The reports follow a similar publication issued late last month by Cushman & Wakefield/Commercial Advisors, which reported that a record amount of Memphis-area industrial space had been absorbed, or filled, in 2015 and that office space recorded its lowest vacancy rate since the Great Recession.
CBRE is seeing the same kind of dramatic growth.
In the last three months of the year, there was net absorption of more than 1.5 million square feet of industrial space, "bringing the 2015 cumulative net absorption to 8.1 million square feet,'' the report states. "This is almost double 2014 net absorption and makes 2015 the strongest year in more than 15 years.''
CBRE credits the city's central U.S. location, a strong network for distributing goods, quality developers and a continuing rebound in the overall economy.
The area's industrial vacancy rate of 7.9 percent has been dropping since 2013, the report states, creating the need for new construction.
Most of the current industrial construction is occurring as speculative projects in the DeSoto and Marshall County submarkets.
The net absorption of 460,024 square feet for Memphis-area retail space was the largest since 2010, the report states. Led by Bass Pro Shops at the Pyramid and Tanger Factory Outlets, the amount of finished retail construction was the most since 2000 at 859,948 square feet.
The vacancy rate for retail fell one-tenth of a percent to 12.5 percent.
"In 2016, expect to see a steady flow of continued activity on the development front consisting of both new construction and redevelopment of existing properties,'' the report states about retail.
"However, as Class A retail sites continue to be in short supply and new developments lease up, the market will likely see a slight slowdown from the activity of 2015.
The busiest segment for the office market in 2015 involved Class B space, because little Class A space was available in the most popular districts, including the East Memphis and Northeast Memphis submarkets, the report states.
The office sector experienced 80,328 square feet of net absorption for the quarter and 370,437 square feet for all of 2015, the largest amount in more than 10 years, the report states.
The number of transactions -- signed leases and move-outs -- totaled 252 for the year, 19 more than in 2014.
"The trend of upgrading to larger or more desirable locations slowed this year as most employers seem to have solved their office space deficiencies, coupled by the fact that more attractive locations have become scarce,'' the report states.
"In fact, companies seeking 10,000 square feet or more of Class A space have few locations from which to choose.''
"Multiple'' proposal requests are floating around for built-to-suit sites for office buildings 50,000 to 150,000 square feet, "which bolsters the hope that market demand will continue and soon initiate the need for new office construction,'' the report states.
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