Memphis Commercial Office Space for Rent
Q4 2025
Memphis Commercial Real Estate Market Report
Focus: Q4 2025 Market Trends
Executive Summary
The Memphis commercial real estate (CRE) market in late 2025 is navigating a challenging landscape, particularly in the office sector, while finding stability in industrial and multifamily assets. The Office market is grappling with high vacancy rates, prompting creative redevelopment strategies [2]. Industrial fundamentals remain a stronghold for the region, supported by logistics and distribution demand, although vacancy has risen to 9.8% due to new speculative supply [1]. Retail is resilient, with low vacancy and steady rent growth driven by consumer spending [3]. Multifamily is stabilizing as the market absorbs a recent wave of deliveries, with rent growth moderating but remaining positive [4].
TenantBase Proprietary Data [5] highlights the distribution of active tenant demand over the last 90 days:
- Retail/Storefront dominated market activity with 66.20% of all searches [5].
- Warehouse was the second most active sector at 18.31% [5].
- Office accounted for 15.49% of total search volume [5].
Office Market
Market Overview Memphis's office market is in a period of transition, with high vacancy rates driving a need for adaptive reuse and strategic repositioning.
- Vacancy & Availability: The office vacancy rate remains elevated, creating opportunities for tenants but challenges for landlords [2].
- Market Trends: There is a growing trend of converting obsolete office properties into residential or mixed-use developments to address the surplus of space [2].
- Tenant Preferences: TenantBase data shows a strong preference for flexibility, with 45.45% of office inquiries seeking leases of Less than one year [5].
TenantBase Activity [5]
- Demand Share: Office accounted for 15.49% of total search volume [5].
- Lease Term Preference: Demand is split between short-term agility and mid-term stability:
- Less than one year: 45.45% of deals [5].
- 2-3 Years: 27.27% of deals [5].
- 3-5 Years: 18.18% of deals [5].
- Size Requirements: The average lower size requirement for office space is 1,500 SF for 3-5 year leases, with smaller requirements for longer-term commitments [5].
Industrial & Warehouse Market
Market Overview The Memphis industrial market remains a key logistics hub, though a surge in new supply has pushed vacancy rates higher.
- Vacancy & Rent: Vacancy rose to 9.8% in Q3 2025 due to significant new deliveries [1]. Despite this, asking rents have remained relatively stable [1].
- Demand & Supply: Leasing activity is steady, with logistics and distribution users driving demand. The construction pipeline is active, which will continue to impact vacancy rates in the near term [1].
- Leasing Highlights: TenantBase data shows limited but targeted demand, with inquiries spread evenly across lease terms [5].
TenantBase Activity [5]
- Demand Share: Warehouse accounted for 18.31% of total search volume [5].
- Lease Term Preference: Demand is evenly distributed, with 25.00% of inquiries seeking Less than one year, 1-2 Years, 3-5 Years, and 5+ Years respectively [5].
- Size Requirements: The average lower size requirement for warehouse space is 10,000 SF for 3-5 year and 5+ year terms, reflecting demand for mid-sized distribution space [5].
Retail Market
Market Overview Memphis's retail sector is performing well, with steady demand and limited new supply supporting healthy fundamentals.
- Vacancy & Availability: Retail vacancy remains low, with neighborhood centers and grocery-anchored developments seeing strong occupancy [3].
- Rental Rates: Rent growth is positive, driven by competition for quality space in prime corridors [3].
- Tenant Interest: Retail dominated search activity in Q4, confirming the region's vibrant consumer economy [5].
TenantBase Activity [5]
- Demand Share: Retail/Storefront activity dominated with 66.20% of all search volume [5].
- Lease Term Preference: Retail tenants show a strong commitment to the market:
- 5+ Years: 40.00% of deals [5].
- Less than one year: 25.00% of deals [5].
- 2-3 Years: 20.00% of deals [5].
- Top Locations: Tenant interest is highest in Memphis (City) (10 deals) and East Memphis (7 deals) [5].
Multifamily Market
Market Overview The multifamily market is stabilizing after a period of rapid growth. While new supply has softened rent growth, demand remains healthy.
- Vacancy & Occupancy: Vacancy is stabilizing as the market absorbs new units, with occupancy rates holding firm [4].
- Rents: Rent growth has moderated but remains positive, offering opportunities for investors seeking steady cash flow [4].
- Construction: The construction pipeline is thinning, which will support tighter market conditions in 2026 as new deliveries slow [4].
2026 Outlook
Looking ahead to 2026, the Memphis market is positioned for continued evolution and stability.
- Industrial Resilience: The industrial sector will continue to benefit from Memphis's status as a logistics hub, with vacancy expected to stabilize as construction slows [1].
- Retail Strength: Limited new supply and steady consumer spending will keep retail vacancy low and rents rising [3].
- Office Transformation: The office market will continue to see adaptive reuse projects, reducing obsolete inventory and creating new opportunities for mixed-use development [2].
Sources
- Cushman & Wakefield: Memphis Industrial MarketBeat Q3 2025
- CBRE: Memphis Office Figures Report Q3 2025
- Cushman & Wakefield: U.S. Shopping Center MarketBeat Reports
- MMG Real Estate Advisors: Memphis Q2 2025 Market Report
- TenantBase Proprietary Market Data (Memphis - Last 90 Days)
Information in this report is aggregated from various third-party sources and synthesized using artificial intelligence and other research tools. While we believe these sources to be reliable, we cannot guarantee the absolute accuracy or completeness of the data. This report is intended for informational purposes to provide market insight and should be independently verified prior to any use in a real estate transaction or legal commitment.