Fort Features: 4 Reasons to Invest in Memphis
At Fort, we are constantly looking for new investment opportunities that will deliver exceptional returns to our investors and stakeholders. Over the past year, we identified Memphis, Tennessee as a market that not only fits our investment criteria but also shares several parallels with the Texas markets where we currently invest. After extensive research and time spent building our knowledge of and relationships within Memphis, we acquired our first property in January 2022.
Here are our top four indicators of Memphis being a strong market for industrial investment:
1. Demand for Industrial Space is on the Rise with a Vacancy Rate below 10% [1]
The demand for industrial space in the city is surging. Net absorption has skyrocketed to 3.2 million SF as of May 14, 2021. Construction of new industrial product has been well underway in Memphis as well. With 217,312 SF delivered in Q1 2021, 16,193,809 SF remains under construction.
Institutional investors and developers have been heavily invested in the Memphis market for years due to its strong demand and vacancy rate which has consistently remained below 10%. This has caused investment sales volumes to be at all-time highs. However, our niche deal size of $10M – $75M presents a large opportunity. Utilizing our technology advantage, we are easily able to identify off-market opportunities that are under the radar for these institutional buyers and too large for individual investors.
2. Memphis International Airport (MEM) ranked as #1 busiest cargo airport in North America [2]
Memphis has a central location in the country and is located along the Mississippi River, one of the world’s most important commercial waterways, which makes their international airport a strategic location for shipping and cargo transport. Additionally, FedEx’s shipping capital, the World Hub, is located in Memphis. The airport handled 4.47M metric tons of cargo in 2018[3]. With the rise of e-commerce, this number is expected to continue rising. This benefits Fort’s investments because it will continue to drive the need for more warehouse space.
3. Shelby County, home of Memphis, has emerged as the second-largest county in the U.S. for medical device manufacturing [4]
Though the transportation and logistics sector has been dominant in Memphis, the medical and pharmaceutical sectors are gaining a larger presence. Companies within these industries see a growing potential in Memphis as a hub for being the center of the medical supply chain in the U.S. St. Jude Children’s Hospital, based in Memphis, has already grown into a multi-billion-dollar healthcare provider. This has been a significant reason as to why there has been growth within the city.
4. Finance & Real Estate Industry makes up 14.9%, the largest, of Memphis’ Economy [5]
Memphis’ overall economy has been on the rise for the past couple of years. This is due to a low cost of living, a high quality of life, and favorable tax laws for businesses. The city is considered a manufacturing and logistics hub in the country.
When investing in a new city, we at Fort make it essential that we understand what we are buying and the importance behind it. We see Memphis has the potential to bring valuable returns because of its similarities to Texas’ real estate market, its central location in the U.S., and its use as a major shipping location for major corporations.
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