Johnson Development to Solicit Projects for 113-Acre Memphis Industrial Complex
- Nov 29, 2012
By Barbra Murray, Contributing Editor
Johnson Development Associates has big plans for Aerotropolis Logistics Park, the 113-acre site it acquired in Memphis, Tenn., earlier this year. The company is making the property available for as much as 1.2 million square feet of speculative development and build-to-suit opportunities and has tapped commercial real estate services firm Jones Lang LaSalle Inc. to spearhead the marketing effort.
Given the current state of the Memphis industrial market, it appears that JDA’s endeavor is kicking off at the right time. Demand for Class A accommodations continued to climb in the third quarter, driven to a great degree by healthcare, retail and third-party logistics companies, according to a report by JLL. For industrial tenants, the attractiveness of the Memphis market is undeniable, due in no small part to the very simple issue of practicality; affordable labor, low cost of living and relatively low industrial rental rates are reeling in renters.
And the attraction to Aerotropolis is likely to prove irresistible as well. The property, which will bloom on the former site of the Mall of Memphis, is not only located in the right city, it’s sited in the right area of the right city. Aerotropolis is within three miles of Memphis International Airport, the second largest cargo airport in the world, and just four miles away from the newly expanded BNSF Memphis Intermodal Facility. And then there’s the park’s close proximity to the Port of Memphis, which holds the distinction of being the fourth largest inland port in the U.S. Additionally, its immediate access to I-240 puts it within easy reach of the third-busiest trucking corridor in the country.
The call for large blocks of premier industrial space in Memphis has been growing louder, as noted in the JLL report. New Breed Logistics recently expanded its presence in Memphis by taking on 404,400 square feet at Southpark Distribution Center O. And in the absence of availability, some companies are creating additional elbowroom for themselves. In October, Nike Inc. revealed that it will invest $301 million in a project that will add 1.8 million square feet to its 1.1 million square-foot facility.
In the Memphis industrial real estate sector, bigger is better at the moment. “There currently is a void in the market for Class A industrial product over 500,000 square feet,” Jack Wohrman, an associate broker with JLL, told Commercial Property Executive. “The Memphis market currently has one existing Class A building over 500,000 square feet that is vacant and one under construction.” Worhman added that four spaces with more than 500,000 square feet of contiguous square footage have been occupied by new tenants to date in 2012. “Consequently,” he added, “tenant demand will likely outweigh supply in 2013, requiring more new construction.”
Aerotropolis certainly has its local backers. The City of Memphis contracted MAP Studio Planning and Policy Advisors for an assessment and the firm gave the project solid thumbs-up.
“We support the Aerotropolis [planned development] application because we believe that the JDA group will provide the right mix of project financing, sensitivity to land use issues, attraction of top-notch companies to the site, and commitment to urban revitalization,” Louise Mercuro, president of MAP Studio, wrote in a letter to the City Council.
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