Absorption is up in Memphis office properties for the first quarter of 2015, but with Class A vacancies tightening, secondary submarkets and Class B office space is poised to be filled by the third or fourth quarter of this year.
According to a report released by Colliers International
, Memphis is seeing the smallest amount of office space available since late 2010 with the greatest number of prospective projects in the pipeline since 2007.
With East Memphis Class A vacancy decreasing nearly 8 percent since early 2011, developers are going to be pushed off the Poplar Corridor. Presently, there is only 150,000 square feet available for Class A office space in East Memphis. According to the report, this tightening likely lead to increased attention to space along the 385 Corridor, which has 571,000 square feet in vacancies.
Suburban Class B properties fared about the same as office space in the Downtown central business district with 22,000 square feet in absorption. However, sizeable vacancies in the Raymond James Tower, One Memphis Place and Union Center offset this resulting in overall negative absorption for Downtown.
Predictably, the construction of the 250,000 square foot tower at International Place IV drove a lot of the quarter’s growth. Total vacancies across Memphis decreased by 0.3 percent since the previous quarter.