Memphis Industrial Investment Forecast
Locational Advantage and Supply Chain Infrastructure Aid Industrial Performance Amid E-Commerce Boom
Shipping firms drive need for industrial space in Memphis. The city's central location has contributed to an agglomeration of shipping and logistics firms in the metro creating a favorable cluster for industrial assets. The Memphis International Airport is a central point for these firms highlighted by FedEx's hub the firm's largest in the country. The city recently invested $500 million to support additional cargo operations boosting demand for nearby space. Southeastern Memphis adjacent to the airport is home to roughly 35 percent of the metro's inventory and booming demand led the submarket to record net absorption above 6 million square feet in 2021. Despite record-breaking construction in 2021 demand was even stronger resulting in a 50-basis-point drop in vacancy last year. The metro's rail system and access to the Mississippi River through the Port of Memphis augment the airport to create ample distribution methods for firms. These factors contribute to vacancy reaching its lowest year-end measure on record this year.