Dive Brief:
- Memphis' logistics network appears to be driving demand for warehouses in the metropolitan area, especially in its Mississippi suburbs, according to an analysis of real estate data by The Commercial Appeal.
- Demand for industrial buildings, mostly warehouses, has translated into construction of 1.8 million square feet in the second quarter. Most of the construction is happening in Mississippi's DeSoto and Marshall counties, the newspaper reported.
- The vacancy rate in Memphis' industrial market has fallen and the CBRE report mentions rumors that developers are checking sites for potential new industrial parks. Higher lease rates are also drawing more institutional investors.
Dive Insight:
A similar Cushman & Wakefield report released last week noted a 31 percent increase in Memphis industrial space leasing activity in the first half of 2016 over the same period last year, the newspaper noted.
A quick look on the Greater Memphis Chamber of Commerce website reveals there are 100 industrial buildings available for sale or rent, and the city's target industries include manufacturing, logistics and distribution.
In addition, second quarter statistics for the whole of the U.S. suggest construction is struggling to keep up with industrial demand. A CBRE report of the southeast region notes Atlanta's logistics-hub status is seeing a rise in demand for modern distribution space. Other cities, such as Savannah, GA are seeing their industrial vacancy rate fall from 20% to 2% in the last three years.
