Commercial & Industrial REAL ESTATE Special Edition September 2010 Commercial & Industrial The Daily News takes a year-long look at an industry in transition REAL ESTATE – and in turmoil. SPECIAL EDITION Looking Strong In The East Solid performance in the East Memphis submarket keeps CRE afloat. Page 17 Photo: Lance Murphey East Memphis’ busy Poplar Avenue corridor made plenty of commercial real estate news this year highlighted by the Crescent Center (back) selling for $52.6 million, the largest CRE deal in five years. Other buildings in the submarket performed well as the recession toiled on. Memphis and Glankler Brown’s City’s Robust Olive Branch Go Move to East Industrial Market Head to Head for Memphis a Works to Weather New Business. “Huge” Deal. Economic Storm PAGE 4 PAGE 6 PAGE 10 2 Commercial & Industrial REAL ESTATE Special Edition September 2010 Available 96,000 SF WAREHOUSE www.memphisdailynews.com Published by: THE DAILY NEWS PUBLISHING COMPANY 24’ CLEAR HEIGHT 193 Jefferson Avenue P.O. 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Rankings based on number of listees. 10-BB-399 MDN Best Lawyers Ad M.indd 1 9/3/10 11:09:47 AM September 2010 Commercial & Industrial REAL ESTATE Special Edition 3 Contents Commercial & Industrial REAL ESTATE Special Edition 6 Opportunity Abounds Andy Cates of Colliers International says “act now” on all the commercial real estate deals out there. 11 Rollin’ ‘Round the Bend Come in and try some A new intermodal yard in Fayette County has brought commercial real estate dreams to neighboring areas. of our newest menu items 13 Class A Transaction The Crescent Center fetched $52.6 million this past summer, the biggest CRE sale in five years. 21 Cloudy with a Chance of Default Economist Mark Dotzour predicts a long, painful recovery for the commercial real estate market. • Real Estate IN THE NEWS the board as immediate past president. be affected by the construction or new ing its supermarket just up the street at MAAR Commercial Council Also returning as officers and direc- store. 1150 N. Germantown Parkway. Economic Welcomes Board Members tors for 2011 will be Scott Barton of CBRE; The footprint of the new store is about decisions were similarly behind that deci- Tanis Hackmeyer of Hackmeyer Proper- 87,000 square feet, compared to the less sion to close. The Memphis Area Association of Re- ties/Hackmeyer Realty; Dawn Barber of than 60,000 square feet of the current Samuels is selling its entire Cordova altors Commercial Council held its annual Makowsky Ringel Greenberg LLC; Bob store. Bell said 30 new jobs will be created inventory. “Everything from our Cordova board of directors recently, approving Turner of Southern Properties LLC; Steve for the larger new store. location must go,” the letter to customers three new members for its 2011 board. Guinn of Highwoods Properties; Eric The Delta Division of Kroger covers reads. Greg deWitt of Grubb & Ellis Co. Fuhrman of Investec Realty Services LLC; West Tennessee, Arkansas, Mississippi will take over one of the council’s direc- and J. Hickman of Colliers International and parts of Kentucky and Missouri. The tor seats next year before becoming the Management Services. division operates 111 stores. Galloway Gardens Complex council’s vice president in 2012. He will The Kroger Co. is publicly traded on Sells for $1.1 Million inherit the seat occupied by John Mercer the New York Stock Exchange. Kroger of Highwoods Properties in 2011. Kroger Files Permit For employs 334,000 people across the com- Galloway Gardens LLC has bought Also joining the board are Jim Beaty of Poplar/Highland Store pany, which includes everything from su- the 45-unit Galloway Gardens Apart- CBRE’s Capital Markets group and Brad- permarket and warehouse grocery stores ments from California-based Steve Benetti ley Wilford of Boyle Investment Co., each The Kroger Co. has filed a $10 million to jewelry stores and convenience stores. and Virginia Benetti for $1.1 million. The of whom will take on two-year director building permit application for its store at complex, which was built in 1970, sits in the positions. The new positions are effective 3444 Plaza Ave. near the corner of Poplar Evergreen Historic District in Midtown, on Jan. 1. Avenue and Highland Street in Poplar Samuels Furniture to Close the south side of Galloway Avenue between Commercial real estate’s struggles of Plaza. G’town Parkway Store North Willett Street to the west and North late have underscored the importance of The company plans to build a new Avalon Street to the east. MAAR’s Commercial Council, an organi- store on the west side of the shopping Samuels Furniture and Interiors at The sale was financed with two zation that helps members navigate the center where it is located, said Joe Bell, 1615 N. Germantown Parkway is closing $200,000 loans through Regions Bank – market’s tricky landscape, deWitt said. manager of marketing and public affairs soon, the store informed customers and with one due next year and one in 2015 “The Commercial Council is an for Kroger-Delta Division. neighbors via a letter. – and an assumption of a $916,937 loan important organization highlighting the The start date for construction is “Samuels Furniture and Interiors has that matures in 2013. The listing agent for commercial side of our business,” he said. tentative because the building is currently served the good people of Tennessee, the sale was Steve Woodyard of Woodyard “Sometimes the much larger residential occupied and some tenants’ leases run out Arkansas and beyond with their premier Realty Corp. side of MAAR can overshadow the needs next year. home furnishing needs for over 94 years,” The property features two-bedroom, and concerns of the commercial side. We “We just know kind of a drop-dead the letter reads. “Unfortunately, because one-and-a-half-bath floor plans with an on- hope to bring some recognition to these date when the latest is that we could get of circumstance and the economy in gen- site laundry, according to a statement from groups.” started. Our guess is we’ll get started eral, we have made the very difficult deci- Woodyard.. Other changes to the council in 2011 sometime mid-year next year,” Bell said, sion to close our Cordova location only.” The new owner, which plans to lease will include president-elect Ron Riley of adding construction of a store takes nine A store employee said an exact date the units for $650 to $750 a month, will In-Rel Management Inc. taking over for months to a year. for the closure was not yet known. manage the property through the company 2010 president Wyatt Aiken of Commer- The current store will close when the The news comes a week after Sch- that manages Gramercy Park Apartments cial Advisors LLC. Aiken will remain on new store opens. The fuel center will not nucks Markets Inc. announced it is clos- near Bartlett, according to the statement. 4 Commercial & Industrial REAL ESTATE Special Edition September 2010 The Hard Sell Memphis and DeSoto County duke it out for jobs ANDY MEEK | The Daily News o understand how Northwest Mississippi’s small boomtowns like Olive Branch keep one-upping Memphis and reeling in jobs and taxpayers with the promise of Tgreener pastures, an Internet video is one place to start.