How e-commerce led to an industrial boom
The pace of growth accelerated over 10 years
Demand for industrial space has exploded over the past decade, driven in large part by the continued growth of ecommerce. The Memphis area, as a logistics hub, has been part of that boom. The market has added more than 45 million square feet of industrial space since 2012.
The pace of that growth accelerated over the decade, with the metro area adding 9.4 million square feet of industrial space in 2021 alone, according to a report from commercial real estate agency Commercialsearch. That was the most industrial square footage added in any Southeastern market last year. It was the first time since 2014 that another market in the Southeast added more industrial space than Atlanta.
Overall, industrial sales in the Memphis market hit $611 million last year, up from $28 million in 2012.
The report looked at growth in the 30 largest industrial markets, which collectively saw 1.6 billion square feet of new industrial space in the last 10 years. Memphis was 14th on the list in overall square footage added since 2012.
Memphis fits the national trend of what is driving industrial growth.
“In the last 10 years, industrial development was primarily concentrated in transportation nodes and port markets,” according to report author Lucian Alixandrescu. Memphis hosts one of the world’s busiest cargo airports, the thirdbusiest trucking corridor in the U.S. and the fifth-largest inland port in the country. “The largest completions are typically regional distribution centers operated by e-commerce giants, and considerably larger than the largest completions just 10 years ago,” according to Alixandrescu.
E-commerce giant Amazon is among the companies that have been expanding physical footprints in Memphis in recent years, opening fulfillment centers, delivery stations and sorting centers and hiring thousands. Other out-ofstate companies have been pumping money into Memphis as well. New Yorkbased LRC Properties has spent more than $80 million to buy up 1.7 million square feet of industrial real estate in the area in the past two years. Principal Karie Nero said the company plans to continue investing in the market.
“It’s in a large state of growth from a distribution standpoint,” she told The Commercial Appeal last year. “We did some analysis during COVID, a lot of analysis, and really looked at what are the markets in the Southeast that have the best growth pattern right now. And we see a lot of those characteristics in Memphis.”
Apryl Childs-potter, executive director of the Center for Economic Competitiveness at the Greater Memphis Chamber, said much of the metro area’s growth in the logistics and supply chain fields was due to the continued rise of online shopping.
“Most of this has been driven really by what we’ve seen in e-commerce,” she said. “Operations are definitely growing in this sector because of a pandemic-era transition that’s likely irreversible into online purchases in a way we haven’t seen before. So we anticipate that this logistics and supply chain specialization will only continue to grow as we move forward.”
Corinne S Kennedy covers economic development and healthcare for The Commercial Appeal.