July 22, 2015
Firm Developing Final Tract at Ridgeway Center
– The Memphis Business Journal –
As the Memphis office real estate market continues to churn along, Boyle Investment Co.is preparing to begin building out the final tract of land at its Ridgeway Center Complex with up to a 200,000 square foot facility and hotel.
Ridgeway Center, located at I-240 and Poplar, is a multi-use park started in the 1960s that now consists of about 1.6 million square-feet of space. The remaining 21 acres Boyle has to build on will consist of about 300,000 square feet when completed.
"The first building will range between 100,000 square feet and 200,000 square feet," says Mark Halperin, Boyle senior vice president.
"We think we have a crackerjack site there, and we’ve had substantive talks with some possible anchor tenants," Halperin says. "We’re planning a combination of Class A office space and a hotel."
The office building will be located across from Memphis-based Weston Cos.’ recently launched $12 million, 100,000 square foot office building on Shady Grove, a four story facility where Weston will relocate its headquarters.
The 21 acres Boyle will begin developing extends back to the company’s most recently completed office building at Ridgeway Center, the six-story, 150,000 square foot Sedgwick Building. Boyle also began construction recently on a two story, 50,000 square foot speculative office building at Humphreys Center.
That building was the first new product the company launched since the Thomas & Betts headquarters project.
"We’re continuing to see good demand," Halperin says. "It’s not like a herd of longhorns stampeding, but it is a good, stable market.
Those are sentiments echoed throughout the office real estate industry and evidenced by the fact that several developers have recently decided to put more speculative space on the market. For example, Weston’s new building is the first office building the company has launched in more than a decade.
Koger Equity, Inc., a Jacksonville, Fla. based real estate investment trust, has stated construction on a four story, 113,000 square foot facility at its Memphis complex at Walnut Grove and Germantown Parkway, the fifth of six planned buildings. That project comes on the heels of the company completing a 50,000 square foot building at the site.
"I don’t see any gaps in the market right now," says Anthony Lopes, Koger general manager in Memphis. "Of course, there is a lot of space coming on the market, a lot for Memphis at least, but I think it will be absorbed."
Besides Weston, Boyle and Koger, Raleigh, N.C. based Highwoods Properties, Inc., has under construction several specific buildings, including the four story, 90,000 square foot building on the northeast side of the International Place complex, which the REIT owns and operates.
The company also is launching a three story, 74,000 square foot office building at Southwind, where it has under construction a similar three story, 70,000 square foot building there that is nearing completion now.
Draper & Kramer has a 70,000 square foot facility going up at the Nonconnah Corporate Center and has cleared a site for a 40,000 square foot building in the same complex.
And Clark & Clark has under construction a 96,000 square foot speculative office building at Lenox Corporate Park, located off of Nonconnah Parkway and Mt. Moriah.
"Traditionally, leasing activity slows a little during the winter, but there’s a lot of activity right now," says Nick Clark of Memphis based Clark & Clark. "And to be ready for the demand in the spring, you really need to begin building during the winter.:
The more than 400,00 square feet of office property under construction isn’t causing concern among developers, who are all cognizant of the danger of the overbuilding that occurred in the 1980s.
"There’s a lot going on, and it’s yet to be seen how it will be absorbed, but we’re definitely very sensitive to overbuilding," Halperin says. "Long-term owners like us are sensitive because having too much space on the market hurts us. Having too little space is bad for the tenants. So a stable market is in everybody’s best interest."
Besides the Ridgeway Center build-out, Boyle has its sight set on the Collierville area, where the company is planning to develop its 450 acre Schilling Farms and 245 acre Price Farms. Schilling Farms will be about a $350 million, mixed-use planned development on the western edge of Collierville.
Price Farms, located on the southern edge of Collierville, will consist of about 150 acres of commercial and office space and will be directly south of the planned 400,000 square foot Federal Express Corp. technology campus.
"Collierville is where you’re going to see the next wave of development," Halperin says. "You’ll start seeing office space going up at Schilling farms and Price Farms in the next 12-18 months."