Memphis Industrial market going up, Office market stable

The Memphis Business Journal has two articles up today on the state of the Memphis market. They got their numbers from the first quarter CBRE marketview reports.

The first article focuses on the Office market.

Office vacancy in the first quarter was 17.4 percent, up slightly from 17.2 percent in fourth quarter 2009. This was the ninth quarter in a row with increased vacancy, but still below the U.S. average of 19.1 percent.

The article goes on to state that it's still a "tenant's market". Yes. Yes it is. If I were a tenant with a lease coming due in the next 6 to 24 months, now is the time to approach your property manager and negotiate your next lease. If they aren't game, there's 17.4 percent of the office market that would LOVE to have you as a tenant.

The second article focuses on the Industrial market.

The industrial market experienced six tenants signing leases for more than 2.1 million total square feet in the first quarter.

The average asking lease rate in Memphis dropped $0.01 to $2.62 per square foot in the first quarter, a slowing of the $0.10 drop from third quarter 2009 to fourth quarter 2009.

Vacancy dropped from 19 percent in fourth quarter 2009 to 17 percent in first quarter. The vacancy rate is expected to drop again in the second quarter, when more than 1.5 million square feet of positive absorption is expected.

That's great news for commercial real estate in Memphis. The Industrial market is the backbone of commercial real estate here in town, and we've got a lot of it to go around. Good news for everyone.

Sneak peek at March Home Sales Info

Shh. Don't tell MAAR.

March Home Sales, Pricing Increase as Buyers Take Advantage of Tax Credit

MEMPHIS, Tenn., May 4, 2010 –Memphis-area home sales showed strong gains in March, increasing 35.4 percent from February with 1,323 total sales recorded in the Memphis Area Association of REALTORS® MAARdata property records database. Sales were up 4.9 percent from March 2009, boosted by buyers looking to take advantage of the tax credit that ended on April 30. Overall pricing was strong, with median price up 13.9 percent from March 2009 and average price up 1.8 percent. Pending sales jumped 14.6 percent from February 2010 to 1,920 units, an increase of 11.8 percent from a year ago. Inventory was up 4.5 percent to 9,562 units listed for sale.

(The emphasis is mine) Full press release here.

Those parts I bolded are good news for Memphis real estate in general and sellers in particular. When I talk to people considering selling their property, I feel a need to counter the hyperbole they hear from the New York and Los Angeles media. Yeah, real estate is crappy out on the coasts. I'm sorry for them. But the market is FAR better in our stable market of Memphis than their high flying Malibu and Manhattan markets.

Here in Memphis people are buying and selling real estate every single day. Every. Single. Day. Prices aren't as high as they were a couple years ago, but that's just the way the market works. Sometimes things are in favor of the seller, sometimes they're in favor of the buyer. Right now the buyer is in the drivers seat. In a couple years, the seller will be back in the drivers seat. And it'll go back and forth until the Mississippi rises up and reclaims our fair town.

How do you feel when you see a vacant building?

What do you feel when you see a vacant building?

Do you feel sympathy for the small business owner who had to watch his dream die?

Do you feel sad about the vandalism and broken windows?

Do you feel concerned for your safety because of the people living in the building who don't have a "home" of their own?

Do you feel wistful for your favorite restaurant that had to close?

What do you FEEL when you see a vacant building?

Blatant Plug: "Money In Your Pocket" Seminar on April 21st.

LOOK! Press Release!!!

Crye-Like Commercial will host a free one-hour seminar Wednesday, April 21st at 5:30 p.m. at the Crye-Leike Corporate Center, 6525 N. Quail Hollow. The seminar is titled “Money in Your Pocket: 3.5 Things you Need to Know Before you Sell Your Commercial Real Estate.” For more information, call (901) 828-9200 or e-mail will.hicks@crye-leike.com.

There's no charge for the seminar, but reservations are recommended. If you are in the process of selling your commercial real estate or considering selling it, you'll learn 3.5 aspects of selling your property that will mean Money In Your Pocket at the closing table.

Feel free to call me direct at (901) 828-9200. I'll see you there.

2010 MAAR Commercial Property Forecast Summit preview

The 2010 Commercial Property Forecast Summit is tomorrow. I'll be live tweeting the highlights while it's going on from 8:30ish to 12:00 noon. You can follow along here.

The Commercial Appeal has had a couple articles up previewing the event. This one is about vacancy concerns for the Memphis market and this one is an optimistic look at the year ahead.

Here's a rundown of the speakers.

Featured Speaker
Dr. Mark Dotzour
The Chief Economist and Director of Research for the Real Estate Center at Texas A&M University in College Station, Texas. He earned his Ph.D. in the Department of Finance at the University of Texas at Austin in 1987 and served as Associate Professor of Real Estate and Finance at Wichita State University for 10 years. As Chief Economist, he is currently doing market research to monitor how global and national trends are likely to impact residential and commercial real estate markets.

If pressed, he will confess to being an ardent fan of Star Trek. He considers William Shatner to be one of the finest actors, writers and singers of our generation.

Local Market Updates
Ron Riley, In-Rel Management
Andy Cates, Colliers Wilkinson Snowden
Scott Barton, CB Richard Ellis
Blake Pera, CB Richard Ellis

Local Perspectives
Jim Beaty, CB Richard Ellis
Todd Glidewell, C&I Appraisals
Larry Jensen, Commercial Advisors

Summit Chairman
Nick Clark, Clark & Clark

I met "It's Friday" guy on the elevator this morning...

I was riding up the elevator at the Crye-Leike mothership this morning and there were two other guys on with me. I don't usually feel compelled to chat up people on an elevator, or subject people to my "elevator speech", but I realize some people enjoy the anonymous conversation on an elevator with people you don't know and may or may not ever see again.

Guy number one says to us, "Well, at least it's Friday". No one was complaining about having a job to come in to on Friday. We were just riding the elevator.

I used to work as a SCUBA Instructor at a Crisis-Response/Disaster Relief training academy. They had a cafeteria styled lunch which usually had a few announcements at the end of the meal. When he was done, the guy giving the announcements would ask "Are there any more announcements?" For a while it was a "thing" for someone to say "It's Friday!"

Thoreau said "The mass of men live lives of quiet desperation". I've had a few days that weren't exactly peaches and cream, but to live a life of quiet desperation would be terrible.

A few more thoughts on "It's Friday" guy.

1) Be happy you have a job. If you're unemployed every day is Saturday, but without a paycheck from yesterday.

2) How much do you hate your job? Go get a different one. The paper is full of other companies that would be happy to have your services.

3) Are you the depressed "It's Monday" guy too? How about "It's humpday"? You have that one covered too?

VHS vs. Beta, Blu-Ray vs. HD-DVD, Loopnet vs. CoStar

I remember going to the video store with my parents when I was a kid. I would pick out the coolest movie and bring it to my dad. He would tell me "No, that movie is Beta." "Yeah Dad, it's beta' than the ones that are marked VHS".

Eventually VHS beat out Beta and was the undisputed choice for home entertainment for almost 20 years.

Recently HD-DVD and Blu-Ray had their own format war. Half of the major Hollywood studios were releasing movies on HD-DVD, half were releasing their movies on Blu-Ray. They went back and forth for almost two years before the tide started to turn. Warner Bros. switched sides from HD-DVD to Blu-Ray. Blockbuster, Netflix and Wal-Mart followed suit by no longer carrying HD-DVDs.

CoStar and Loopnet have been going back and forth like HD-DVD and Blu-Ray for years. It's been a source of irritation among agents in my office for years. "Why can't their just be one service?" "Why can't they make a commercial equivalent to the residential MLS?"

Yesterday, Loopnet released their iPhone app. The reason this is a big deal isn't just that they have an app. It's that the app is GOOD. If CoStar doesn't answer with an app of their own, and quickly, Loopnet will gain ground that CoStar will be hard pressed to ever win back.

I don't think CoStar will ever go away, but they don't have to. All that has to happen is Loopnet (or CoStar. Whoever.) has to become the undisputed #1 commercial real estate listing service. And the Loopnet app for the Iphone gets us much, much closer to that.