Huge Memphis Industrial Lease Caps Busy Q3
Thursday, October 22nd 2015
MEMPHIS, TN – The largest lease of the year has gone to a Fortune 500 Company.
TJX Cos., the parent company of T.J. Maxx, Homegoods and Marshalls, signed on with 800,000 square feet at Memphis Oaks III in Southeast Memphis.
Cushman & Wakefield/Commercial Advisors, who represented building owner Panattoni Development Co., were unable to confirm the new tenant. But a CB Richard Ellis Memphis Industrial MarketView report named T.J. Maxx as the tenant in the deal, which was the third quarter’s largest industrial lease transaction.
The deal will create hundreds of jobs and millions in capital investment, according to C&W/CA principal Kemp Conrad, who represented Panattoni in partnership with Patrick Walton.
“The TJX deal shows the continued strength of the market,” said Patrick Burke, senior vice president of industrial services with CBRE Memphis. “The previous tenant, Sharpe, needed to vacate early and TJX leased the space prior to their expiration.”
“We appreciate the confidence of our new customer in Panattoni and are glad to take our Memphis portfolio to 100 percent leased,” said Whitfield Hamilton, Panattoni’s regional director. “This deal represents good growth and investment in process and people for the Memphis market, and demonstrates that there is sustained absorption in Shelby County.”
Last week, Panattoni filed a $5 million building permit for interior alterations to the Memphis Oaks III warehouse, at 3860 E. Holmes Road. The building, which measures a little more than 1 million square feet, is appraised at $25.1 million, according to the Shelby County Assessor of Property.
Michael Reid and Tim O’Callaghan of commercial real estate firm Binswanger represented the tenant.
The TJX deal capped a busy quarter for Memphis industrial, which saw more than 2 million square feet of positive absorption. The market is having its best year since 2000, according to the CBRE report, with cumulative 2015 absorption approaching 6.5 million square feet.
The vacancy rate, which dropped from 9 percent in second quarter to 8.6 percent last quarter, hasn’t been that low in 15 years, according to CBRE.
Panattoni’s Hamilton also said the building “was the last spec building built in Memphis.”
But while there is no more available spec space in Memphis, new construction is coming down the pipeline with an estimated 1.5 million square feet set to be delivered to the market in fourth quarter 2015. Most of that real estate is going up in Mississippi’s Marshall and DeSoto counties.