Memphis Commercial Office Space for Rent

Q3 2026

Q3 2026 Memphis Commercial Real Estate Market Report

Focus: Q3 2026 Market Trends

Executive Summary

Memphis industrial absorbed 1.57 million SF in Q3 2026 as asking rents reached $4.90/SF NNN, up 6.1% year over year, with DeSoto County leading leasing. xAI's $20 billion investment in Southaven adds to the region's data center growth. On TenantBase, Q3 Memphis tenant searches split evenly between office (50.0%) and retail (50.0%), with office demand more than doubling from 21.9% in Q2.

Sector Snapshot

  • Office: Demand rising. Office reached 50.0% of TenantBase searches, up from 21.9% in Q2.
  • Industrial: Tightening. Vacancy fell to 5.4%, and availability dropped 170 basis points year over year.
  • Retail: Steady. Vacancy was about 6% for properties over 20,000 SF.
  • Multifamily: Renter-friendly. Median rent was $1,065, down 1.0% year over year.

Memphis Tenant Demand Index

The TenantBase Tenant Demand Index tracks what businesses across the Memphis region are actively searching for on the TenantBase platform each quarter. Because it measures tenant intent before leases are signed, it shows where demand is heading ahead of traditional vacancy and absorption data.

Q3 2026 Search Share by Space Type (July 1 to September 30, 2026)

  • Office: 50.0%
  • Retail/Storefront: 50.0%
  • Warehouse/Industrial: 0.0%

Three-Quarter Trend

  • Office: 19.4% in Q1, 21.9% in Q2, 50.0% in Q3
  • Retail/Storefront: 62.2% in Q1, 65.8% in Q2, 50.0% in Q3
  • Warehouse/Industrial: 18.4% in Q1, 14.9% in Q2, 0.0% in Q3

Key Takeaways

  • Office demand more than doubled, from 21.9% of searches in Q2 to 50.0% in Q3.
  • Office tenants want flexibility. 66.7% of office searches sought terms under one year, up from 45.5% in Q2.
  • Short-term office searches are small. Under-one-year office searches averaged 1,500 to 3,000 SF.
  • Retail tenants are committing longer. 64.3% of retail searches sought terms of 3 years or longer.
  • East Memphis led location interest, followed by Downtown and Midtown.

Office Market

Key Metrics (Q2 2026, CBRE)

  • Direct vacancy: 16.7%, up 170 basis points year over year
  • Net absorption: negative 16,100 SF in Q2, with Class A positive at 13,300 SF
  • Direct asking rent: $21.26/SF, up 6.9% year over year, with Class A at $23.24/SF
  • Construction: no new deliveries
  • Submarkets: Midtown at 11.3% and $18.89/SF, Downtown at 12.0% and $21.21/SF, East at 15.7% and $25.19/SF, and 385 Corridor at 18.8% and $19.61/SF

TenantBase Office Activity

Demand share: 50.0% of Memphis tenant searches, up from 21.9% in Q2 and 19.4% in Q1.

Lease terms:

  • Less than 1 year: 66.7%
  • 2 to 3 years: 26.7%
  • 5+ years: 6.7%

Space requirements by term:

  • Less than 1 year: 1,500 to 3,000 SF
  • 2 to 3 years: 1,000 to 2,500 SF
  • 5+ years: 2,500 to 5,000 SF

TenantBase data vs. the market: Memphis office tenants on TenantBase are favoring short terms for small spaces. With no new construction and Class A tenants absorbing space, tenants focused on the East submarket should expect higher rents than in Downtown or the 385 Corridor.

Industrial & Warehouse Market

Key Metrics (Q3 2026, CBRE)

  • Vacancy: 5.4%, down 20 basis points quarter over quarter
  • Availability: 8.9%, down 170 basis points year over year
  • Net absorption: 1.57 million SF in Q3 and 4.48 million SF year to date
  • Asking rent: $4.90/SF NNN, up 6.1% year over year
  • Construction: 3.54 million SF underway, mostly in Marshall County, including Amplify Cell Technologies' 2 million SF facility
  • Submarkets: DeSoto absorbed 2.04 million SF at 4.1% vacancy and accounted for nearly 65% of leasing volume

TenantBase Warehouse Activity

Demand share: 0.0% of Memphis tenant searches, down from 14.9% in Q2 and 18.4% in Q1.

TenantBase data vs. the market: No warehouse searches were recorded on TenantBase in Q3, while large distribution users drove 7.04 million SF of leasing. Smaller industrial tenants face rising rents as availability falls.

Retail Market

Market Conditions

  • Vacancy: about 6% for properties over 20,000 SF as of June, up about 50 basis points year over year (Marcus & Millichap)
  • Redevelopment: mixed-use projects include The Cooper in Midtown and the Oak Court Mall redevelopment in East Memphis (REBusinessOnline)

TenantBase Retail Activity

Demand share: 50.0% of Memphis tenant searches, down from 65.8% in Q2 and 62.2% in Q1.

Lease terms:

  • 3 to 5 years: 50.0%
  • 2 to 3 years: 28.6%
  • 5+ years: 14.3%
  • Less than 1 year: 7.1%

Space requirements: 3 to 5 year searches averaged 2,500 to 5,000 SF.

TenantBase data vs. the market: Memphis retail tenants on TenantBase are planning multi-year commitments for mid-size storefronts. Vacancy near 6% in larger centers gives tenants options, especially in redeveloping East Memphis and Midtown corridors.

Development & Economic Drivers

  • xAI: a $20 billion investment in Southaven, Mississippi, its third data center facility in the area (Yahoo News)

Multifamily Market

Memphis median rent was $1,065 in October 2026, down 1.0% year over year, according to Apartment List. RealPage reported occupancy of 94% in March 2026, with fewer than 90 units under construction.

Q4 2026 Outlook

  • Office: Expect demand for small, flexible spaces to continue, with no new supply.
  • Industrial: Expect rents to keep rising as availability tightens in DeSoto County.
  • Retail: Expect redevelopment in Midtown and East Memphis to shape new storefront supply.
  • Multifamily: Expect occupancy to hold as the construction pipeline stays minimal.

Frequently Asked Questions

What type of commercial space are Memphis tenants searching for in 2026?

In Q3 2026, Memphis tenant searches on TenantBase split evenly between office (50.0%) and retail (50.0%).

What is the industrial vacancy rate in Memphis?

Memphis industrial vacancy was 5.4% in Q3 2026, with asking rents of $4.90/SF NNN, according to CBRE.

What is the office vacancy rate in Memphis?

Memphis office direct vacancy was 16.7% in Q2 2026, according to CBRE.

How can I find commercial space in Memphis at no cost?

TenantBase matches business tenants with vetted independent tenant rep brokers across the Memphis region at no cost to the tenant. Brokers are compensated by the landlord. Get started with TenantBase.

Sources

  1. TenantBase proprietary search data, Memphis, July 1 to September 30, 2026
  2. TenantBase, Memphis Commercial Real Estate Market Report, Q2 2026
  3. TenantBase, Memphis Commercial Real Estate Market Report, Q1 2026
  4. CBRE, Memphis Office Figures, Q2 2026
  5. CBRE, Memphis Industrial Figures, Q3 2026
  6. Marcus & Millichap, Memphis Retail Market Report, 3Q 2026
  7. REBusinessOnline, Memphis Retail Redevelopment, August 2026
  8. Yahoo News, xAI Southaven Investment, 2026
  9. Apartment List, Memphis Rent Report, October 2026
  10. RealPage, Memphis Apartment Market, March 2026

Disclaimer

Information in this report is aggregated from third-party sources and TenantBase proprietary platform data, and was synthesized with the assistance of AI. Market metrics reflect the most recent published data available at the time of writing. TenantBase search data reflects tenant activity on the TenantBase platform and is not a measure of total market leasing. All figures should be independently verified before making real estate decisions.