Target Takes 900 KSF in Memphis
- Dec 30, 2014
New leases, build-to-suit leases, lease expansions–big-box retailers are staking claim to big chunks of space outside of the leading markets, and Target’s commitment to a 900,000-square-foot facility in Memphis is among the latest transactions. The discount retailer will invest $50 million to tailor the building at 5461 Davidson Road to its specifications.
Commercial real estate services firm CBRE Group represented Target in the lease transaction, while Cushman & Wakefield | Commercial Advisors L.L.C. stood in for the landlord, which, according to Shelby County property records, is Memphis Industrial Park Inc., an entity affiliated with UBS Realty Investors.
The pull of Memphis for industrial users, according to Cushman & Wakefield, lies in the location.
“We can reach 75 percent of the country’s population within a three-day truck drive and we’re quadrimodal – meaning a nexus of logistical infrastructure including rail, roadways, runways and river,” Kemp Conrad, president of Cushman & Wakefield-Commercial Advisors Asset Services, noted in a press release.
Originally developed in 1998, 5461 Davidson was once occupied by Hamilton Beach, but it most recently served as a seasonal home for media technology company Technicolor SA, which had set up shop in 600,000 square feet of the building. For its purposes, Target will utilize the facility as its regional online fulfillment center, serving the southeast region.
Target’s repositioning of 5461 Davidson will bring the distribution center online in mid-2015. Redevelopment was perhaps the company’s best bet in the area.
“Market activity is robust, and developers are building spec in North Mississippi; however, there has been no spec development in Memphis since 2007–creating an opportunity for a pioneer in the core Southeast Memphis submarket,” Conrad told Commercial Property Executive.
But it’s not just about Memphis. According to a Cushman & Wakefield report, “Demand for big-box space is also growing in secondary major distribution and population hubs such as Indianapolis, Memphis, Phoenix and Houston.”