Memphis Industrial Market Report

Supply and demand continue to undercut recent norms. The local industrial sector is facing a transitional period as developers and tenants experience post-pandemic rebalancing. Completions from 2020 to 2023 totaled 41.3 million square feet and was met with net absorption of roughly 37.4 million square feet. Yet demand began softening in the second half 2023 — a trend which has carried into the first quarter this year. Deliveries in 2025 will hit a 15-year low, but net absorption is expected to remain negative, resulting in a third straight annual vacancy rise. Still, the metrowide rate will stay 170 basis points below the post-2000 average. As the only submarket with more than 10 million square feet in inventory to post vacancy drops in each of the last two years, Northeast Memphis has been the most resistant to the ongoing slowdown. Bolstered by its position near Interstates 40, 269 and 240, Northeast Memphis exited March with vacancy at 4.0 percent ahead of scheduled move-ins by xAI, LifeScience Logistics and GE Vernova totaling over 2.2 million square feet.