DCT Industrial Sees Strong Leasing Activity in Memphis

DCT Industrial Trust Inc., a Denver-based industrial REIT, has signed more than 770,000 square feet of leases in Memphis, including two companies that expanded and a new client.With these leases, DCT Industrial’s operating portfolio in Memphis is 96.9 percent leased. The REIT owns or manages 5.4 million square feet in 11 buildings in Memphis and has one 885,000-square-foot building under development.DCT Industrial’s new customer is Quebecor World Logistics, a distributor of catalogs, publications and newspaper inserts, which leased a 149,000-square-foot bulk distribution facility for 39 months.Mallory Alexander International Logistics, a third-party logistics company which has its corporate headquarters in Memphis, renewed its lease for 218,000 square feet and leased an additional 120,000 square feet to occupy the entire 338,000-square-foot building for a three-year term.HD Supply Distribution Services renewed its lease for 193,000 square feet and took an additional 91,000 square feet to occupy its entire 284,000-square-foot building under a seven-year lease.“We are extremely happy with the level of leasing activity that we’ve seen in Memphis over the past few months,” John Tugman, vice president & regional director of leasing for DCT Industrial, said in a release. “Our portfolio of high-quality assets in Memphis enables us to meet the expansion needs of existing customers as well as attract new customers.”The DCT Industrial Memphis portfolio has buildings that range from 60,000 square feet to about 1 million square feet, eight of which are in the Southeast submarket, according to a Jan. 25, 2008, story by Andy Ashby in the Memphis Business Journal. Grubb & Ellis Co.’s first quarter 2008 Industrial Market Trends report for Memphis noted that leasing in the Southeast submarket was strong in the first quarter of this year. The report noted that of 84.5 million square feet of space available, about 11.4 million square feet was available with a vacancy rate of 13.4 percent. Average rents for the first quarter in Southeast submarket warehouse and distribution facilities was $2.73 per square foot and $6.65 per square foot for R & D and flex buildings, according to Grubb & Ellis research.The report noted that in general in Memphis rents for warehouses had remained stable but had dropped a bit for flex space. The entire Memphis market saw 814,608 square feet of new product delivered in the first quarter with another 1.26 million square feet under construction. The report states that about 70 percent of the new space under construction has been pre-leased.As of March 31, 2008, DCT Industrial, which owns, operates and develops bulk distribution and light industrial properties in high-volume distribution markets in the United States and Mexico, had 76.9 million square feet of assets leased to about 850 clients. That includes 12.1 million square feet DCT Industrial manages for three institutional joint venture partners. DCT Industrial’s overall portfolio occupancy was 93.2 percent as of March 31, according to the REIT’s first quarter 2008 financial report issued May 1. Occupancy jumps to 94.3 percent when adding in the joint venture properties. The REIT noted in the Q1 report that it has signed 1.9 million square feet of leases during the first quarter. DCT Industrial also stated that “tenant retention continued to be favorable with a rate of 72 percent for the first quarter of 2008.”