FLIGHT. 5 | NO. 52 | Saturday 22 December 2012
Midtown’s real estate market has long been an anomaly compared to its Bluff City counterparts, with fundamentals as diverse as its demographics.
“The types of real estate you find in Midtown can be some of the most expensive or some of the most modest in terms of price and facilities,” said Gary Myers of Gary Myers Co. “Retail trade in particular.”
Midtown is one of Memphis’ most eclectic neighborhoods, adorned with vintage homes, international cuisine, and trendy entertainment venues. Due to much of its pre-single-use zoning development and grandfathered properties in modern codes, it is not uncommon to find a fast food chain next to an apartment building. high rise overlooking a community school.
It’s an entirely different landscape than Germantown Parkway, which for years has facilitated access to national concepts based on prototype stores on new builds. But that model is evolving in Memphis and elsewhere, as more investment is made in core cities on a macro scale, said Alex Turley, vice-president of CB Richard Ellis Memphis.
“The growth of the suburbs has slowed down, but retailers still want to open stores. They were kind of forced to look inside into the more established and dense areas, ”Turley said. “The development opportunities have happened slowly in Midtown, because it’s not like you’re dealing with raw land.”
Turley is behind two ongoing deals in the Union Avenue corridor, Midtown’s main east-west thoroughfare, traveled by some 33,000 cars a day. Five Guys Burgers and Fries ascend the less than an acre parcel where the Mid-South Title Loans once stood 2100 Union Avenue. And Panera Bread Co. built the former Pizza Hut space at 1961 Union.
The two fast casual franchises are expanding in downtown Midtown after having a strong presence in East Memphis. Plus, each project has its own intricacies and involves a more unique approach, rather than the traditional placement of a retail tenant in a standard mall.
“You have to be creative about how you enter the Midtown market,” Turley said. “You either have to assemble a property, renovate a building, or tear it down and build accordingly. I think retailers are still realizing that Midtown is an incredibly dense and underserved market.
Perhaps the best example of the year of a resourceful retailer in the Midtown market is Kroger’s acquisition in September of the 10-story Belvedere Apartments at 1733 Union as part of a long-term project to reconfigure the outdated and contested layout of the grocery store.
Kroger then bought his store which he rented from the Art Seessels family, along with two adjacent plots, bringing Kroger’s property in the South Idlewild Street area to LeMaster Street along Union.
“The first question I was asked when we bought the store (from Schnucks last year) was when are you going to do something different and new or fix the parking lot at that location,” word of Kroger. Joe bell recently told the Daily News. “We think it would be a major boon to the commercial sector if we could build a new store in this sector, and our customers appreciate it. “
Turley’s listing of the Old US Post Office and its 45,825 square feet of land at 1520 Union has the chance to further boost Union’s retail activity. He said he had “a lot of activity”.
“It seems to me that whenever something becomes available on Union, it doesn’t stay on the market for too long,” said a property tax professional and real estate investor. Taylor caruthers. “It’s just the place to be right now.”
Rip Crain, a franchise partner at several TCBY stores in Memphis, recently launched their first 24-hour coffee shop at 1308 Union, filling the space CK’s Coffee Shop has operated for years. He said Union’s congestion and cramped grounds make parking, entering and exiting difficult.
“The biggest problem with Union Avenue, and we knew it, was parking,” Crain said. “It really limits our clientele, but we felt it was a pretty good compromise to have a Methodist hospital across the street and have that clientele available 24 hours a day. have a long way to go from the hospital.
Further developments for postal codes 38104, 38111 and 38112 may be underway. Mohamad Hakimian, owner of The Madison Downtown hotel and CEO of Unison Hotel Co. Inc., completed a feasibility study for the conversion of the long-vacant French Quarter Suites hotel into a 100-room luxury boutique hotel. His group is “at the stage of raising capital” for the four-story building which is still owned by its original ownership group.
A converted hotel would fill another vacant corner at the intersection of Madison and Cooper and complete Loeb Properties IncThe $ 20 million redevelopment of Overton Square. The local Gastropub opened its second Memphis restaurant in Yosemite Sam’s former home this fall, and Bar Louie is slated to open in the curved building across the street in March.
The proposed revitalization of the Sears Crosstown building also has the potential to radically transform a changing Midtown neighborhood. Nine health care, education and arts organizations have pledged to occupy approximately 70 percent of the 1.5 million square foot tower.
“You have the potential to attract a pretty sizable daytime population, kind of like your own economic hub in a pretty strategic location,” Turley said, touting its proximity to the 26-acre Washington Bottom site, Uptown and the medical center. . “As people work and live there, you’re going to have retail businesses. That’s the way retail works, they follow people.
To this end, Jimmy Ringel, partner of Makowsky Ringel Greenberg LLC, plans for the multi-family to strengthen its presence in Midtown, one of only two hallways in the city ready for new apartment construction and infill development.
“The expected growth is really going to occur due to population shifts, either further east in the Germantown / Collierville area, or further downtown and into Midtown. You start to see Midtown take its roots in terms of really being in the conversation about the new development.
– Jimmy Ringel, Partner, Makowsky Ringel Greenberg LLC
“The expected growth is really going to happen due to population shifts, either further east in the Germantown / Collierville area or further downtown and into Midtown,” Ringel said. “You’re starting to see Midtown take its roots in terms of really being in the conversation about the new development. “
Meanwhile, Midtown landscape designer and property owner Greg Touliatos has said he expects the Broad Avenue Arts District to continue its slow and steady resurgence. Thanks in large part to the efforts of the Business Association, Broad has achieved a lot of success lately, but it has been slower than Touliatos had anticipated.
“Due to the downturn in the economy, investment money has been slow to attack it,” Touliatos said. “It’s starting to seem like it’s going to happen now. “
Touliatos is the owner of 2655 Broad Avenue., where Green Girl Produce plans to build Memphis’ first indoor vertical farm as a year-round source of organic mircogreens. Going forward, Touliatos is looking forward to setting up a retail nursery near Flicker Street “because Midtown doesn’t really have access to those kinds of amenities.”
For some, Midtown also lacks the basics of real estate. This can make the execution of all plans and activities in the area risky.
James Raspberry of Rasberry CRE said most national retailers are not looking to locate in Midtown because of how its demographics match those of other submarkets. The highest average household income it can find in the immediate area is $ 55,000, which is “pretty slim” compared to areas such as Forest Hill-Irene in Germantown and Poplar-Interstate 240 in East. Memphis, which are respectively $ 135,000 and $ 124,000.
“If a retailer or a national chain comes to Memphis, they’re going to take the fruit at hand,” Rasberry said. “They’re going to go to the easiest household income figures that work with their models. I think we are facing in Midtown that the development is organic. We grew up from the inside out, which eventually gets cool and gives it all its character, but it’s not a quick fix and it’s not easy. Rasberry said Midtown’s real estate climate is also difficult because its rental rates in the market are so low that it is difficult to get a return on investment in new construction.
“It’s kind of like developing retail 101,” he said. “Am I surprised we couldn’t get Trader Joe’s or whatever?” It doesn’t shock me. It’s an 8,000 square foot store and we don’t have wine by the bottle sold in grocery stores.
Melanie Myers, broker with Gary Myers Co., rents retail space across town, including shopping malls near Sears Crosstown. Even marketing second-generation spaces to prospects who are in the same area as the previous tenant, reducing construction costs, Myers said landlord concessions and rental rates are often misinterpreted.
“Sometimes when people call, no matter what price I offer them, they always think it’s way too much,” Myers said. “I could tell someone that something is renting for $ 1 a month and they would wonder why it wasn’t 50 cents.”
It’s not just the economy that comes into play in Midtown. This is how it in turn affects the region’s quality of life issues that concern Sam goff, mortgage loan officer with Bank Evolve & Trust and chairman of the Midtown Memphis Development Corp. He calls the way certain new transactions are authorized by the Planning and Development Office “administrative deviation.”
“Depending on an individual project, they can effectively bypass the Midtown Overlay by accepting an individual developer’s request not to have to comply with certain elements of the Unified Development Code or the Midtown Overlay,” said Goff. “This indeed goes against the overall objective, which is to create a more pedestrian-cycling neighborhood environment that is conducive to people who go out on the sidewalks, cycle and enjoy their neighborhood.
Goff added that he has been very pleased so far with Kroger’s transparency and willingness to address community concerns for his new Midtown store.
“From a development standpoint, it seems like all the pieces that need to come together are starting to come together,” Goff said. “We are very excited about what this portends for Midtown.”