Memphis Industrial Development Outshines Most US Markets

May 26, 2025

Market Updates Development In Focus Industrial More Investment Southeast

The Tennessee metro emerged as a national industrial hotspot, according to CommercialEdge.

With roughly 12.5 million square feet of industrial space underway, representing 4.2 percent of total stock, Memphis’s construction activity in early 2025 was among the highest among major U.S. markets.

Fueled by landmark developments like Ford’s BlueOval City, the metro is solidifying its status as a key logistics and manufacturing hub in the Southeast, while also seeing heightened investor demand and competitive pricing.

As of March, Memphis had 12.5 million square feet of industrial space underway, accounting for 4.2 percent of the existing inventory—the highest share among all significant U.S. markets. The metro’s active pipeline consisted of just four large-scale developments.

Only Phoenix outpaced Memphis in terms of total space under construction, with 15.9 million square feet. Other comparable markets, including Indianapolis (3.8 million square feet), New Jersey (6.3 million square feet) and Chicago (6.9 million square feet), trailed behind.

Rendering of the Magna BlueOval City battery enclosures plant in Stanton, Tenn. The Canada-based company plans to build two facilities at Ford’s supplier park in Stanton and a third plant in Lawrenceburg, Tenn. *Image courtesy of Magna International*

The region’s growth is anchored by BlueOval City, Ford Motor Co.’s nearly 6-square-mile electric vehicle campus near Stanton, Tenn. The project is one of the largest automotive investments in U.S. history, expected to produce 500,000 electric pickup trucks annually. Ford’s joint venture with SK Innovation includes a 4.2 million-square-foot battery plant next to the EV facility. Combined, the two sites represent an $11.4 billion investment and are anticipated to create 11,000 jobs.

Auto parts manufacturer Magna International is also expanding in support of the new ecosystem, committing nearly $800 million to three new facilities. Two of these will be integrated within BlueOval City, while the third will be located in Lawrenceburg, Tenn.

Sales volume nearly doubles year-over-year

Memphis’ industrial investment volume surged during the first quarter, recording $182 million in sales through March. The metro saw 2.8 million square feet of space change hands across eight properties, nearly doubling the $72.2 million volume recorded during the same period last year.

Two industrial properties that changed hand sin Memphis. — The two industrial properties that changed hands in Olive Branch are Stateline Building K of347,604 square feet and the 241,994-square-foot Crossroads Building L. Both are fully leased to Motivational Fulfillment & Logistics Services and American Musical Supply. Image courtesy of JLL

At $75.81 per square foot, Memphis remained one of the most affordable major industrial markets, according to CommercialEdge. Only Kansas City posted a similar average ($74.85 per square foot), while markets such as New Jersey ($255.63) and Phoenix ($176) far exceeded the $125 national average.

Sealy & Co. expanded its Memphis-area footprint with the acquisition of a two-building, 589,598-square-foot portfolio in Southaven and Olive Branch, Miss., both in the DeSoto County submarket.

In one of the largest deals of the quarter, Robinson Weeks Partners acquired two facilities totaling 831,974 square feet in Olive Branch, Miss., part of the 10-building Legacy Park campus developed by Hillwood.

Vacancy inches up, but rents stay competitive

Exterior shot of the industrial facility at 11384 Progress Way in Olive Branch, Miss. — Encompassing 448,942 square feet, the cross-dock property at 11363 Progress Way features 36-foot clear heights, while the 383,032-square-foot rear-load building at 11384 Progress Way includes 32-foot clear heights. Image courtesy of Robinson Weeks Partners

The metro’s vacancy rate reached 9.2 percent in March, according to CommercialEdge, up from previous quarters and above the 8.5 percent national average.

Memphis continues to offer some of the most competitive industrial rents in the country. In-place rents averaged $4.17 per square foot, while new leases signed at $4.67 per square foot—both well below national levels. For comparison, Miami recorded the South’s highest rents, with in-place pricing at $12.54 per square foot.

The region’s low cost of occupancy and strong infrastructure continue to support tenant interest, particularly from logistics and automotive-related users.