Shawn Massey, CCIM, SCLS

Memphis: The real estate dichotomy of our city!

For years Memphis was a city divided by race.  This week our commercial real estate industry was divided not by race, but by a difference in real estate development ideology and participation.

It was a big week in our city for CRE education. On Wednesday February 8th I attended the MAAR (Memphis Area Association of Realtors) Commercial Property Forecast Summit that is held every year and on Thursday, February 9th night I attended Urban Magnets: Lessons in Sustainable Place making that was hosted by Cross-town Arts, ULI Memphis and Livable Memphis.  The Summit was held at the GPAC in Germantown and Urban Magnets was held in Midtown and the Memphis College of Art.

Both of these events were very well attended the keynote speakers were outstanding leaders in their respective fields. Both events addressed local real estate development needs and concerns.

The commercial summit keynote speaker was Dr. Loren Scott, a professor emeritus of economics from Louisiana State University.  My take away from Dr. Scott was that in the real estate industry there is a level of cautious optimism with a great concern for the state of the financial world.  The recession was not as deep and as long as most feared, but recovery will be slow and potential for more dips.  Local professionals updated us on the various CRE disciplines of Industrial, Office, Multi-Family, Land and my favorite Retail markets.  Industrial and Multi-Family for lack of a better term are “kickin it!”   Wyatt Aiken of Commercial Advisors talked about talked about the strong number of industrial deals completed in the market which netted a positive absorption of over 1.5 million square feet and strong pipeline of possibilities in the future.   These deals include Electrolux and several other manufacturers. Eric Bolton (MAA) was the most positive as the nations renters are growing due to lack of financing of new homes and stating that a slower job growth.  Office and land (other than producing farm land) are years from recovery.   According to Ron Kastner with CBRE the major problem in the office market is the lack of new small businesses that are opening.  The majority of the vacancy in the office market is spaces of around 5000 square feet or less.  Bob Turner said that we have abundance (3-10 years of inventory) supply of residential lots available and commercial land sales have slowed due the lack of new development.   I had mixed feelings in regards to the retail presentation.  Josh Poag with PM Lifestyle Centers admitted that his basis of assessment of the retail market was more of a national scope versus a micro look at the Memphis retail market.  Most of their retail company developments are located throughout the country.  He emphasized the slowdown in retail investment sales and lack of new retail development in our city.  It is my opinion that this is related more to the financial crisis than to the lack of retail tenant demand.  Reid Dulberger the new CEO of the city/county economic development authority known as EDGE presented an update on the economic development inatives of our city and county.  I believe most attendees in the room were excited about that great opportunities and simplicity that EDGE brings to doing deals in our area of the country and how more competitive we will be in the future.  My only disappointment was a presentation by my old friend Will Taylor who is with Vining Sparks who literally “sucked the air out of the room” with his concerns of the financial markets.  The title of his talk was, Financing; where has all the money gone?    He started with how CRE Valuations have move back to pre 2002 levels.  He emphasized the CMBS defaults in Memphis are the third worst in the country at 23%.  He finished with a good lesson on why Dodd Frank   needs to be repealed as it takes away the banks incentives to make loans.  The last take away I got from Mr. Taylor was that I need to deal more with community banks with less than $ 10 billion in capitalization who are less restricted by these federal regulations.  These presentations are posted at

The public talk on Urban Magnets: Lessons in Sustainable Place-Making featured keynote speaker Alan Boniface, AIA the current managing partner of Vancouver studio of DIALOG.  I will start off that Vancouver is one of my most favorite cities in the entire world.  If I had seen Vancouver earlier in my life, I may have been writing this blog overlooking Vancouver Island and the Pacific Ocean.  It is wonderful city that exudes the virtues of sustainability and real estate development.  Alan did a great job on explaining the concept of “Urban Magnets” and how they relate to urban development.  This is sometimes referred to by architects and planners term “place-making”, He did enough research on Memphis to relate this Urban Magnets concept back to our city.  Very few national speakers take the time to do this!  We also saw a short film on three areas of our community that are working to bring these place-making concepts together.  These included; the South Main district, Overton Square and the Hernando, Mississippi town square.  These developments served as points of comparison for the overall theme of the night.  This film brought it full circle when a group of local panelists and Alan answered the audience’s questions.   I did not ask Alan the question that was most pressing in my mind.  Vancouver is blessed with great year round temperatures that allow for a more comfortable year round outdoor living.  I would have asked him if he would like to ride a bike here to work when temperatures are above 100 degrees.  I have been to Granville Island which he discussed in great detail. He indicated that they have no national retail tenants on the island.  I believe that will work in the second most popular tourist destination in Canada after Niagara Falls, but not necessarily in every walk-able community.  The rest of Vancouver has many national tenants woven into the fabric of their city.  I wish speakers like Alan would recognize that national and regional retail tenants are not the enemy of new urbanism.  This presentation should be available on the ULI Memphis website.

So here we have two excellent events that deal with the commercial real estate industry.  As I look around the room Thursday night, I saw no one from the Summit attending.  I know that Belz, Boyle and Loeb had different attendees at each event and I applaud these companies for supporting both events.  Neither did I see any Urban Magnets attendees the day earlier.  The Summit was attended by CRE industry professionals from brokerage, banking, contractors and developers in the community.  The Thursday event was attended mostly by architects, planners, artists and involved citizens who are looking to see the development of more sustainable communities in our city.  My apology if you were among the select few attendees to attend both events and I did not acknowledge you.  My friends and family know that I like to quote statistics (sometimes they are actually correct).  I have been told that 37% of the American population desires to live in sustainable and walk able communities, yet this type of development only encompasses only 7% of our supply of communities.  The attendance at these two events show the giant chasm that exists between those CRE professionals who have the expertise, determination and capital to make these developments happen and the other side who like to plan, talk and live in these place-making communities, but do not necessarily take ownership of  the commercial properties in their area.  I am part of the 37% who would like to again live in safe, sustainable and walk able community.  I was born and raised in Montreal and walked or used public transportation to go everywhere.  I had lived in Memphis for two years before I got a drivers license and only then because I needed to cash a check when I was in school at the University of Memphis.   I think it would be beneficial for both groups to learn more about the other and see the desires and limitations that exist in each of their viewpoints.  I am not saying that some of the CRE community is not involved in these sustainable communities, but their participation and engagement is somewhat limited by the organizations that plan events like the public talk on Urban Magnets.  On the other hand it would have been beneficial for Thursday attendees to go to the MAAR Commercial Summit and learn the state of the CRE industry and how both groups could work together to build our great city.  A better bridge needs to be build between these two groups so there is continuity of both visions and implementation of these urban planning principals.    

Many of these urban design advocates see a neighborhood of independent local stores and restaurants and shun away from national or regional retailers.  There are not enough local entrepreneurs who are well capitalized to fill up the supply of retail space or fulfill the demand of their individual neighborhoods.  National and regional retailers should be dispersed throughout urban mix use neighborhoods not only to serve the neighborhood, but to draw outsiders into the community so that all retailers will prosper.  The community planning groups who advocate new urbanism need to work with their local CRE community to bring in retailers, office users and some cases even industrial uses to their community.  This will provide the opportunity to live, work and play in close proximity.

In the future I hope that the sponsoring organizations for these events will seek each other out and provide the opportunity for outstanding dialogue to promote and build our city up.  We are already seeing this with Loeb Properties and Overton Square re-development.  I applaud Louis and Bob for seeing the vision of what this neighborhood and area could eventually become.  I assure you it would be easier for Loeb Properties to acquire and develop properties in the suburbs and along established retail corridors than to do a public private partnership that is happening in Overton Square.  In the eighties it would have been easier for Henry Turley to do the same, but he chose to go downtown to redevelop multiple properties from the Cotton Exchange Building to Mud Island and we have seen the success so far with that decision.   Our company is starting to talk with the University of Memphis and associated groups to see how we could work together in the University District.  I live in this area.  Both diverse community groups I believe will begin to work with each other bringing the needed capital and expertise of the CRE professionals together with individual neighborhoods we will can then see what our neighborhoods could eventually be become in terms of place-making. 

Perhaps the universities provide the best opportunities to lead the charge to bridge the chasm that exists today!

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Shawn Massey, CCIM, SCLS is a partner with The Shopping Center Group a 3rd party retail real estate advisory firm in their Memphis office, an adjunct professor in the graduate real estate program at The University of Memphis and a co-founder and Chairman of the Board for the Memphis Business Academy charter schools (K-12grade) in the Frayser area of Memphis.  

For all your retail real estate needs (tenant representation, landlord representation and property, investment & land sales) I hope that you will choose The Shopping Center Group and me to represent you and your business.  We understand that representation is a privilege and that you have a choice!

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  1. What an incredible article that rings so much truth about the our retail industry in Memphis.

  2. I agree with the other comments. Very good article that should be distributed throughout the retail community!

    What happened to Overton Square in the 80’s was a result of greed and look what happened to what was once a vibrant and eclectic community. I hope we can bring it back. Look at the Highland Strip. We could make some major improvements there too! Graceland area…the list could go on and on.

    So much potential, so little interest?

  3. You can certainly see your enthusiasm in the work you write. The arena hopes for even more passionate writers like you who are not afraid to say how they believe. All the time go after your heart.

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