Need office space? Memphis’ average rent down slightly

The Commercial Appeal

By Tom Bailey

The average asking rent fell to $17.84 per square foot from $17.97 in the fourth quarter of 2015, in part because more empty space was available in late 2016.

The Memphis market experienced a negative net absorption of 13,600 square feet in the quarter, meaning that much more space was on the market at the end of the quarter than when the fourth quarter started.  The largest move out occurred when Regions Bank vacated more than 10,000 square feet at 1100 Ridgeway loop.

However, construction of new office space soared late last year compared to the end of 2015.  About 965,000 square feet was under construction in the fourth quarter compared to 52,000 square feet in the fourth quarter of 2015, the report states.

Leading the way is the construction of 550,000 square feet of office space inside Crosstown Concourse for such tenants as St. Jude Children’s Research Hospital, Methodist LeBonheur Healthcare and others.   The available office space inside Crosstown is 90 percent pre-leased.

Also, ServiceMaster is converting the old Peabody Place mall Downtown into its next headquarters, Boyle Investment Company is building a 155,000 square foot office building at 949 Shady Grove Road, and MAA, an apartment real estate investment trust, announced it will move from East Memphis to Germantown where it will lease 83,000 square feet in the future Travure mixed-use development.

The Travure and 949 Shady Grove Road buildings, both in the Memphis area’s strongest Class A submarket, will help meet demand for an area where the vacancy rate is just 4.1 percent, according to the report.  The average asking rate for Class A space in the East Memphis submarket was $27.13 per square foot for the quarter.