Young professionals are increasingly choosing to live in the active urban cores of the nation's cities, and Memphis' residential boom Downtown shows the trend has made it to the Bluff City. But with most large employers still choosing office space in east Memphis, could the city struggle to retain this young talent?
The sharp decline of Downtown Memphis followed the assassination of Dr. Martin Luther King Jr. in 1968. That flow eastward toward the suburbs has continued, with the epicenter of office activity in the city now near the intersection of Interstate 240 and Poplar Avenue instead of Downtown.
But a trend is happening nationwide in many of America’s largest cities. City Observatory
, a website and think tank devoted to data-driven analysis of cities and the policies that shape them, tracked Census Bureau employment data from 2002 to 2011 in the 41 largest metropolitan areas.
While not a universal trend, many American cities are seeing a growth in employment in city centers, while some even experience decline in surrounding areas. Employment in city centers – defined as within a three-mile radius of central business districts – climbed half a percent overall between 2007 and 2011, while employment in surrounding areas declined one-tenth of a percent.
The reason? There is a renewed interest in urban cores across the U.S., including in Memphis where residential and business growth is evident across Downtown and Midtown. But in Downtown Memphis, while there is a healthy influx of new businesses taking over smaller spaces, the large Class A spaces remain vacant. And that could have an impact on the city’s ability to attract and retain young talent.
For young professionals who want to live near their jobs, the recruitment pitch from a company that’s located in a downtown might be simpler than one in the suburbs.
“It’s not just in Memphis but you see it now across the country where people want to build life around walking instead of driving,” said Leslie Gower, Vice President of Marketing and Communications for the Downtown Memphis Commission. “More people are drawn to an urban environment. They want a work and living situation melded together without the use of a car… You have major companies out east. They recruit young talent and place them in an apartment in the suburbs. They stay a few months and leave because they think they hate Memphis.”
Alex Stringfellow is one of the young professionals who experiences the Downtown vibrancy first hand. He’s an associate with CB Richard Ellis
, concentrating on leasing office space in Downtown Memphis.
He’s excited about the activity in the neighborhood. There has been great organic growth, particularly with creative firms over the past couple of years, he said. That includes many smaller agencies that are gobbling up Class B space. And it’s good for Downtown, but for someone who represents landlords of Class A properties, it’s a mixed result.
Many of the spaces that are vacant now or will become available over the next year as leases expire are in large chunks – 30,000 square feet or more. And smaller companies aren’t beating down the doors looking for those multi-floor spaces.
“You need established companies with good balance sheets who can take those spaces, and we’re not seeing that right now,” Stringfellow said. “Frankly, to fill them we need some new-to-Downtown blood. We’re somewhat tapped out. We hope as East Memphis gets tighter some of those companies will give Downtown a closer look.”
So how, exactly, do large office vacancies Downtown play a role in retaining young talent in Memphis? Well, it’s not exactly that the space is vacant, it’s that companies are choosing to locate in other parts of the metro area.
And while that’s good for Memphis as a whole, trends with young professionals – anyone from recent college graduates to their mid- to late-30s – is they want to live, work and play in urban cores of cities. And in Memphis, that means Downtown and even Midtown.
When Carly Lyons moved from Houston to Memphis to work for the ESPN Radio affiliate, she temporarily lived in an Extended Stay near Wolfchase Galleria in Cordova. She quickly learned the action was in Downtown, where the radio studio also was located.
“As a young professional I knew that’s where all the action was that I would enjoy,” said Lyons, who has been the Senior Manager of Promotions and Regional Marketing for the Memphis Grizzlies since 2007. “Even in 2005, there was a lot going on and I could see the potential and knew I wanted to be Downtown.”
There is a population boom in Downtown. Just in the South Main Historic Arts District, there is some $450 million in new investment, bringing nearly 2,000 residential units to market. And the demand is there for the residential development.
“You see the residential population Downtown outpacing the city by far,” Gower said. “We’re seeing more people wanting to live in Midtown, too, with all these cool neighborhoods. We know the tide eventually will turn and more of these decision makers will want to live in Midtown and Downtown and open larger companies Downtown.”
Without an influx of new jobs, will young professionals continue choosing the neighborhood? And more importantly, will they choose Memphis or look to another city where they can live in the urban core in a neighborhood that also puts them within walking or biking distance of work?
Lyons moved from Downtown to Midtown’s Central Gardens last year, but that was a compromise with her husband who owned a home in High Point Terrace. She said she has friends in Downtown making decisions to move farther east.
“I have friends at FedEx talking about shortening their commute and moving out East, which is a shame,” she said. “Downtown could do more to attract those companies.”
The Downtown Memphis Commission
works to facilitate the needs of commercial brokers and property owners to make deals happen.
“But what we’re really focused on is making Downtown a better environment where businesses and employees want to be,” Gower said.
That includes safety and blight initiatives, property enhancement resources, and a clean and green program to make the community attractive for office users.
A big win for Downtown could help. Pinnacle Airlines announced in 2010 it would move its 600 employees from the Memphis International Airport area to more than 150,000 square feet of One Commerce Square Downtown. Within three years, the company relocated to Minneapolis and left a gaping hole in the Memphis office landscape.
relocated Downtown 20 years ago, bringing some 900 employees to the neighborhood. But things have been quiet for some time, at least on the major office user front.
Many of the big players in the Memphis job front have corporate offices in East Memphis or near Southwind. Those areas are good locations for professionals with families who live in the suburbs or East Memphis. But job recruits who want to live in the heart of all the action?
“The most frustrating thing I see is friends who are 28 and move here to work at International Paper or other companies out East. Other than a job, they have nothing anchoring them to this city,” Stringfellow said. “That job and that building exists in every city in America. Because there’s nothing unique about the Poplar and 240 area, that’s where they live and hang out. When a job comes up in an urban core city, if it’s a comparable job, they might consider leaving.”
To be clear, Stringfellow isn’t blaming companies for choosing East Memphis. He said it’s important to have a healthy mix of larger employers choosing the urban core.
Kenn Gibbs is from Memphis and works Downtown at AutoZone where he has been a Policy Center Developer for three and a half years. For about the first year of that employment he commuted from Bartlett.
Now he lives a couple of blocks from the office, and finds that he only fills up the gas tank in his car once every few weeks.
“Downtown is by far the best place,” Gibbs said. “I’ve gotten really lazy about driving. As far as being a young professional in Downtown, there are so many opportunities. If I didn’t work down here I don’t know that I would have moved Downtown with an office in East Memphis. … Now that I’m here I see there are a lot of opportunities.”