Memphis, TN Economic Overview
Located along the Mississippi River in Tennessee’s Delta commercial real estate market, Memphis is a city full of old-world charm and modern sights. As of 2016, Memphis had a population of 652,717, making it the second-largest city in the state of Tennessee. Known as the Home of the Blues and the Birthplace of Rock ‘n’ Roll, Memphis is full of historical neighborhoods, musical attractions, and enough shops and restaurants for every person and palate.
The city's central geographic location has been strategically advantageous to its business development. Located on the Mississippi River and intersected by five major railroads and two Interstate Highways, the I-40 and the I-55, Memphis is ideally located for the commerce, transportation and shipping industries. Easy access by water was key to its initial development. Railroad construction further strengthened its connection to other markets. The city is home to Memphis International Airport, the world's second-busiest cargo airport (following Hong Kong). With all of this hustle and bustle, it's no wonder that Memphis commercial real estate is so popular.
Memphis, TN Commercial Real Estate Market
The Memphis commercial real estate market was booming at the beginning of 2017, with over 160,000 square feet of leasing activity, most of which consisted of small-size to mid-size leases in the East, 385 Corridor, Airport, and Downtown submarkets. In addition, there are currently two office developments under construction that total 300,000 square feet.
Midtown Memphis
Central Gardens is a historic neighborhood in Midtown Memphis. Filled with homes built in the early 1900’s, this prestigious but diverse area attracts everyone from young families to significant and established individuals. Cooper-Young is another thriving neighborhood in Midtown that is being restored and is quickly attracting new residents. Cooper-Young has some of the most vibrant local restaurants and shopping stores to be found in the city. The rental market in the Midtown neighborhoods is doing well, with only 17% of Midtown Memphis office space currently vacant.
East Memphis
The high-income area of Germantown is just east of Memphis and is one of the most sought-after areas in the Memphis commercial real estate market. This metro area is a popular choice for families looking for excellent public schools, large homes, and a safe, attractive neighborhood to call their own. This booming East Memphis commercial market has over 7 million square feet of rental space, of which only 14% is currently vacant. With an average rate of $27 per square foot per year, this may not be the cheapest place to locate your Memphis office space, but you will definitely be taking advantage of the demand.
Downtown Memphis
Situated on the north side of the island, Harbor Town on Mud Island is a sought-after area for everyone from professional athletes and politicians to young families and retirees. Residents enjoy extraordinary water views and a small community feel with local grocery stores. The Downtown Memphis commercial market is looking promising for 2017, with rentals priced at an average of $19 per square foot per year.
Memphis, TN Office Sales Volume
Data provided by Yardi Matrix, for properties larger than 50K SF, which sold at over $5M.
Memphis, TN Office Transactions
Data provided by Yardi Matrix, for properties larger than 50K SF, which sold at over $5M.
Memphis, TN Commercial Inventory Breakdown
Office Spaces
Total: 29,895,136 SF
By square footage range:
- 50k to 100k SF: 7,969,142 SF / 26.66% of total office
- 100k to 500k SF: 17,095,903 SF / 57.19% of total office
- 500k to 1M SF: 2,730,091 SF / 9.13% of total office
- > 1M SF: 2,100,000 SF / 7.02% of total office
By class:
- Class A: 9,431,211 SF / 31.55% of total office
- Class B: 16,598,483 SF / 55.52% of total office
- Class C: 1,593,142 SF / 5.33% of total office
Industrial
Total: 151,442,505 SF
By square footage range:
- 50k to 100k SF: 18,084,034 SF / 11.94% of total industrial
- 100k to 500k SF: 75,177,814 SF / 49.64% of total industrial
- 500k to 1M SF: 34,960,234 SF / 23.08% of total industrial
- > 1M SF: 23,220,423 SF / 15.33% of total industrial
By class:
- Class A: 62,332,371 SF / 41.16% of total industrial
- Class B: 80,324,013 SF / 53.04% of total industrial
- Class C: 6,753,261 SF / 4.46% of total industrial
Office Spaces with Retail
Total: 56,159 SF
By square footage range:
- 50k to 100k SF: 56,159 SF / 100% of total office with retail
Employment in Memphis, TN
Memphis is known for all of its tourist destinations as well as its rich tradition of entrepreneurship. With many small businesses, as well as multiple large Fortune 500 companies, Memphis has a variety of different job markets and opportunities.
- FedEx is the largest private employer in Memphis, providing jobs for more than 30,000 people. It was recently ranked 58th on the 2016 Fortune 500, and the headquarters has been based in Memphis since 1973.
- Jude Children’s Research Hospital is internationally recognized for its revolutionary research and innovative treatments of children with cancer and other life-threatening diseases. The hospital employs more than 3,700 people in the Memphis area. St. Jude is the first and only National Cancer Institute-designated Comprehensive Cancer Center devoted solely to children.
- AutoZone is another Fortune 500 company located within Memphis, providing positions for 2,300 people in Memphis. The auto supplies distributor is quickly becoming one of the fastest growing chains in the industry.
- The fourth largest employer in Memphis is International Paper. The global leader has businesses in paper and paper distribution, packaging, and forest products, including building materials. This Fortune 500 company employs nearly 56,000 people worldwide, with close to 2,000 of those being in Memphis alone.
Overall, positions that utilize Memphis office space are on the rise, particularly in the downtown market.
Education in Memphis, TN
The Shelby County School System operates more than 200 elementary, middle, and high schools. The Memphis area is also home to many private, college-prep schools: Briarcrest Christian School, Christian Brothers High School, and the Evangelical Christian School, to name a few. Colleges and universities located in the city include the University of Memphis, University of Memphis Cecil C. Humphreys School of Law, and several other significant universities.
Commuting Time in Memphis, TN
According to the 2015 Urban Mobility Study by the Texas Transportation Institute, Memphis commuters waste fewer hours and less fuel on traffic delays than their counterparts in cities like Atlanta, Austin, Charlotte, Chicago, Denver, and Nashville. The average commute time for residents in Memphis is 24 minutes, far below other metropolitan areas.
Memphis Demographics
Population
- Total Population651,932
- Male Population(47.3 %) 308,460
- Female Population(52.7 %) 343,472
- Median Age34.00
Income/Financial
- Average Household Income$62,592
- Median Household Income$41,228
- Median Income Under 25$25,078
- Median Income 25-44$41,308
- Median Income 45-64$47,151
- Median Income Over 65$36,715
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