An industrial developer on Wednesday broke ground, ending an 11-year drought during which no speculative, top-grade distribution centers were built in Memphis.
Atlanta-based Robinson Weeks Partners joined with the Greater Memphis Chamber for the ceremonial start in building Memphis Global Crossing, a 421,470-square-foot distribution center at Distriplex Farms and Global roads in the vast industrial district of Southeast Memphis.
“Speculative’’ means that the developer is building the state-of-the-art structure even though no tenant has committed to leasing it. But it also means that Robinson Weeks Partners has studied the demand for logistics space in Memphis and likes what it sees.
“We love the fundamentals,’’ Robinson Weeks president David Welch said. “We think this is a perfect time to start a new project."
The facility should attract national and regional distributors as well as e-commerce companies, he said.
The 24-acre site is already teed up for the new building. Previous property owner Prologis built up a dirt foundation for a warehouse, but never built the building.
The new distribution center will be a cross-dock facility, meaning it is designed so products that arrive can be quickly shipped out. The shipments will arrive at docks on one side of the building and leave through docks on the opposite side.
Memphis Global Crossing will have 119 trailer parking spaces, 125 dock doors, and a ceiling with a clear height of 32 feet.
North Mississippi, with its abundance of undeveloped land and low taxes, has been grabbing the headlines for years now by successfully recruiting developers with their speculative and tenant-committed facilities in the logistics industry.
“There was some tax differential between Northern Mississippi and Memphis; that’s been fixed,’’ said John Gaskin, also a partner with Robinson Weeks. “It’s been rectified. From an economic standpoint of taxes, it’s basically even. And we think there’s a better labor force in Memphis.’’
Another Robinson Weeks partner, Forrest Robinson, said the firm prefers to build closer to the center of metro areas like Atlanta and Dallas instead of on the outskirts.
“People are moving back toward the center of cities,’’ he said. “Rather than keep going out and out and out, we’d rather be closer in. We feel like long term, it’s a better investment.’’
It’s not just the millennial generation that wants to be in or near the core of cities, Robinson said. “I know plenty of baby boomers who have been out in the suburbs and they're ready to move in and be closer to entertainment and restaurants.”
Welch and his partners praised chamber and local government officials for making them feel special and wanted.
“We have felt very welcomed and a very valued developer to come to Memphis,’’ Welch said. “I can’t say that about all the places we’ve gone to develop. It’s sometimes very challenging to get through the process.’’
Greater Memphis Chamber chairman Richard Smith said he believes Robinson Weeks’ decision to build in Memphis is a strong sign the city is “about to turn the corner’’ with its industrial recruitment.
“The first Class A industrial speculative space that’s been built since 2007,’’ Smith, also chief executive of FedEx Trade Networks and son of FedEx founder Fred Smith, said of Memphis Global Crossing.
“This is a huge sign that things are going in the right direction," Smith said. "I think we have to show the country and the rest of the world that Memphis is open for business. I think we’re starting to do that."
Kemp Conrad, Memphis city councilman and principal with Cushman & Wakefield/Commercial Advisors, will represent Robinson Weeks in signing tenants for the building. He credited the city’s improving attitude about recruiting employers.
“It’s just a different mentality, more of a business mentality,’’ Conrad said. “It’s really doing government at the speed of business. Just knowing they’re going to be able to get stuff done in a fast way.’’