MEMPHIS | Development News

[Johnny Ryall]

East Memphis' Triad Centre III prepares to open

Triad Centre III is the third in a three-building office complex totaling nearly 400,000 square feet of Class-A office space. It offers a prime office location in the heart of the Poplar corridor, the center of business in Memphis. This seven-story office building will feature an impressive front entry and thru-lobby with granite floors, mahogany wall panels, and barrel vaulted ceiling.



The $30 million project includes an 821-space parking garage that will serve both the new building and its older sibling office buildings, now known simply as 6000 Poplar and 6060 Poplar.

The older buildings will be renamed Triad Centre I and II in a rebranding of Highwoods Properties' 10-acre complex at Poplar at Shady Grove.

[Johnny Ryall]

Smith & Nephew completes $14M acquisition of site for new HQ
the Commercial Appeal | By Toby Sells



Smith & Nephew Inc. completed the $14 million acquisition of what will become its Memphis headquarters on Friday and is ready to begin improvements that will bring employees to the site by late summer. The medical device maker bought the four-story, 285,315-square-foot building that once housed the headquarters of Harrah's Entertainment at 7216 Goodlett Farms. Harrah's left Memphis for Las Vegas in 2008.

The company said the entire project will cost $42 million in real estate, renovations and new equipment. Renovations will begin this winter. "This is not a simple real estate transaction. We will transform this property into the crown jewel of Memphis' biomedical strategy," said Joseph M. DeVivo, president of Smith & Nephew Orthopaedics. "Not only does this property represent the future for Smith & Nephew Orthopaedics, but I believe it will be a catalyst for future investment in our community by other biomedical companies."

The company is expected to move numerous nonmanufacturing jobs to the new site from its Brooks Road location. Management has repeatedly stated that the company will not move out of its Brooks Road location. The move will also allow the company to consolidate some of its U.S. business operations, such as information systems, to the Brooks Road campus. It would also free space for more manufacturing operations at Brooks Road.

The second phase of the Goodlett Farms project would include renovation of a warehouse to laboratories, conference rooms and auditoriums where visiting surgeons will learn how to implant Smith & Nephew's devices. The expansion project will create 160 jobs with annual average wage of $93,427, according to documents the company filed with Shelby County. Matt Kisber, Tennessee commissioner of economic and community development, said the purchase shows Smith & Nephew's continued commitment to Memphis and Tennessee.

Shelby County Interim Mayor Joe Ford said the move will be a further boon for the county and for Memphis. "You could not have asked a company to reward a city like Smith & Nephew has done," Ford said. Larry Jensen, president and CEO of Memphis-based Commercial Advisors LLC, represented Smith & Nephew in the deal. Harrah's was represented by Chicago-based Jones Lang LaSalle.

[Johnny Ryall]

ERIC SMITH | The Daily News

Atlanta-based SunTrust Bank Inc., whose local headquarters at 999 S. Shady Grove Road in East Memphis is shown here, made the largest commercial mortgage in December. -- Photo: Eric Smith


When mortgage numbers reach historic lows – as they have in Shelby County during the past two years – any improvement, however small, should be viewed as positive. The commercial lending industry indeed received a rare dose of good news in December with a bump in commercial purchase mortgage activity, as opposed to refinances. County banks and mortgage companies made 29 commercial loans last month. While that may not seem like much, that number represents a 32 percent increase from 22 loans made in December 2008 and a staggering 123 percent increase from just 13 loans made during November, according to the latest data from real estate information company Chandler Reports, www.chandlerreports.com. It also marked just the second month in 2009 that enjoyed a year-over-year increase from the same month of 2008, with February being the only other month to achieve that status. It put a decent end to an abysmal year marred by an overall decline in commercial mortgages.

As Rick Wood, senior vice president for Financial Federal Savings Bank, told The Daily News for a recent article, the slowdown of commercial lending – especially in the capital markets – has had a huge impact. “It’s pretty dramatic in terms of where we are today with the availability of lending sources to make anything work,” Wood said. “If the lenders can continue to be active as lending sources at any level, that helps the liquidity in the marketplace. But the scrutiny of all product types in underwriting the operations of the property and the rent roll is going to dictate the future of real estate activity going into 2010.”

Leading the way
Commercial mortgages averaged $1.3 million in December, a 42.2 percent increase from $915,800 in December 2008 and a 37.6 percent increase from $946,641 in November. Last month’s average was the second highest of 2009 behind October’s average of $1.5 million. As for total dollar volume, December was tops with $37.8 million, an 87 percent improvement from $20.1 million in December 2008 and a 207 percent improvement from $12.3 million in November.

In a market defined by a dearth of reliable, viable financing sources, seller-financed loans became the primary way for businesses to get capital, albeit in much smaller amounts than normal. In December, Shelby County saw six seller-financed loans that averaged $112,841 and totaled $677,044. As for top lenders, Regions Bank, doing business as Regions Mortgage, ranked first in terms of number of commercial loans made, with three. It was the only company that made more than one loan all month, although the bank’s average mortgage amount and total dollar volume were low. Regions’ loans averaged $205,133 and totaled $615,400. The rankings by total dollar volume placed SunTrust Bank at the top of a list of companies that made one large loan during the month. Atlanta-based SunTrust’s loan of $4.3 million to SignificantPsychology LLC, the company that bought Crichton College, was the largest individual mortgage in December. SunTrust was followed by InSouth Bank with one loan for $3.1 million, Wells Fargo Ltd. with one loan for $2.7 million, Financial Federal Savings Bank with one loan for $1.48 million and First Security Bank with one loan for $1.46 million.

Trending up
Year to date, the mortgage picture is pretty grim. 2009 saw just 247 commercial mortgage loans, a 38 percent dropoff from 397 in 2008 and a 62.7 percent dropoff from 662 in 2007, according to Chandler Reports. Last year’s commercial mortgages averaged $734,372, a 39.2 percent decline from $1.2 million in 2008 and a 79.2 percent decline from $3.5 million in 2007. And last year’s total dollar volume of $181.4 million marked a 62 percent decrease from $479.9 million in 2008 and a 92.2 percent decrease from $2.34 billion in 2007. Just like during the final month of 2009, seller-financed loans led the category of top commercial lenders in terms of number of mortgages made with 58 loans averaging $389,660 and totaling $22.6 million. The top company for loans made was First Tennessee Bank NA with 17 mortgages averaging $523,721 and totaling $8.9 million. It was followed by Regions with 16 mortgages averaging $727,103 and totaling $11.6 million, First Commercial Bank (8, $709,000, $5.7 million), BancorpSouth Bank (7, $513,916, $3.6 million), SunTrust Bank (6, $1.3 million, $7.6 million) and First Citizens National Bank (6, $361,500, $2.2 million).

[Johnny Ryall]

the Commercial Appeal | By Toby Sells

Medical device coating company Surface Dynamics has received a five-year tax freeze from Bartlett for a $5 million facility that will employ 41. The company is finalizing a lease of a 14,500-square-foot facility in the Axel Business Park Subdivision at 3110 Stage Post, according to its payment-in-lieu-of-taxes request.

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It will begin $200,000 in improvements to the space once the deal is completed but company officials believe it should begin shipping finished products by the beginning of June. Surface Dynamics will focus on applying a plasma spray to medical implants for hips and knees. The coating will help promote bone growth into implants. The company's target customers are manufacturers that make orthopedic, spinal or dental implants such as Smith & Nephew, Wright Medical or Medtronic. Its PILOT application said it has a letter of intent for services from a local company but did not specify which one. "We chose the Memphis area because of the concentration of medical device companies and its proximity to customers in other geographies," said Surface Dynamics managing director Roy Smith.

The northeast corner of Shelby County has 26 different biotechnology, or "life sciences," companies, according to Clay Banks, director of economic development at the Bartlett Area Chamber of Commerce. He said these businesses run the gamut from medical-device makers to pharmaceutical distributors. "(Surface Dynamics) will be a good, complementary business to the other medical device manufacturers here," Banks said. "We're also excited about the good wages medical device companies bring with them."

The median wage of a Surface Dynamics employee will be $51,063 with benefits included, according to its PILOT application. The 41 employees will work in either sales, administration or in light manufacturing. Surface Dynamics is owned by a small group of Italian investors, called Centara Srl, according to its application. That group owns four companies all specializing in coating either medical devices, airplane parts or power generators. The companies collectively employ 250 people globally and have annual revenues of more than $70.7 million. Surface Dynamics: In five years, the company says it will have 56 employees, and $2.8 million will be added to Bartlett payroll. Its plasma spray includes titanium powder, which gives bones a porous surface to grow into. Roughly 5,000 work in biotech in northeast Shelby County.

[Johnny Ryall]

Collierville unveils plan for downtown after months of meetings

the Commercial Appeal | By Kevin McKenzie

Debra Daws (left), Mike Hammond and Jay Easter, all of Dalhoff Thomas Daws, work on part of the downtown master plan for the Collierville Town Square, which will be expanded to someday serve as a vibrant neighborhood as well as a destination for tourists.

A plan emerging for the future of downtown Collierville calls for attracting more residents, expanding south of the railroad tracks and stacking up to three or four stories of shops, offices and homes in parts of the area.

Planners used numerous photos to help them come up with a proposal that would keep with the character of Collierville. Some ideas in the plan proposed Thursday are a downtown hotel and disguised parking structures.
After collecting opinions since September and following three days of intensive brainstorming, town planners on Thursday night unveiled the foundation for a Downtown Collierville Small Area Plan.

Town chief planner Jaime Groce said town staff will work to produce a first draft of the new plan by March. The Planning Commission, which will have the final word on its adoption, might receive the completed plan as soon as May. The plan, building on others in the past that were not officially adopted, envisions making the historic Town Square and its surrounding neighborhoods a vibrant neighborhood as well as a destination center for tourism, Groce said. Adopting "new urbanism" trends that scorn automobile-centered design, the new plan will recommend streets and blocks that invite walking and bicycling, mixed-use buildings and a greater variety of housing to attract more residents to the area.

Key ideas include: Expanding the Town Square south of the Norfolk Southern railroad tracks, which may include moving landmark rail cars that block the view from the south. Defining the area to include historic homes on the north side of Poplar and as far as U.S. 72, Collierville-Arlington, Maynard Way and Sycamore at other points. Allowing buildings of up to three stories, or four in some cases, in the downtown core, allowing offices and homes above storefronts. The idea targets streets including Main and Center south of the railroad tracks, Groce said. Encouraging a downtown hotel. Suggesting well-disguised parking structures. Adding connections to the town's greenbelt trail system, which would allow pedestrian and bicycle access to downtown. The plan, which Groce said is flexible and contains concepts for future development, would not affect zoning. Mayor Stan Joyner told about 60 people gathered in a downtown banquet room that his "administration is behind what you're seeing here."

[Johnny Ryall]

Construction continues at Southwest Tennessee Community College on a new academic building that will replace the two main buildings on the school's Macon Cove campus.

The new academic building, which is designed by Looney Ricks Kiss and Fisher & Arnold, Inc., is budgeted at $17 million.



The building will include 59 new classrooms and labs, five offices. Ronald Parr, vice president of financial and administrative services for Southwest, says "It'll be 109,000 square feet, replacing 69,000 square feet we currently have."

Southwest currently opened a new campus at Hack's Cross and Forest Hill Irene to replace its Mendenhall campus, as well as constructing a new library at Macon Cove.
The two-story, 69,300-square-foot library includes a media gallery, cyber cafe/poets corner, and surround sound auditorium and multimedia conference rooms that will be available for community use. All three projects are budgeted at $60 million and being financed by the state of Tennessee.

Also in the Design/ Planning stage:
The Natural Sciences, Nursing & Biotechnology Building at the Union Ave. Campus in the Memphis Medical Center. Construction of 3-story structure; will include a 200-seat auditorium, 16 classrooms, a nursing wing, and laboratory budgeted at $16 million. Construction is expected to begin in Spring 2010.

[Johnny Ryall]

Methodist/LeBonheur Hospital - Germantown, TN

Memphis Business Journal - by Michael Sheffield

Interior at Methodist Germantown’s new Women’s and Children’s Pavilion
ALAN HOWELL | MBJ

Shortly after Methodist Le Bonheur Germantown Hospital opens its new 218,000-square-foot Women’s and Children’s Pavilion Feb. 12, the hospital will begin the next phase of its $121 million renovation project: improvements to 100,000 square feet of space that previously housed the women’s care facility. Those improvements will include construction of a new 16-bed intensive care unit and expansion of adult surgical space, the hospital’s pharmacy and cardiovascular department. The renovations are scheduled to be completed late this year, says William Kenley, CEO of Methodist Le Bonheur Germantown. Once the project is completed, Kenley estimates the hospital will hire up to 100 new non-medical staff employees. It currently has 1,200 employees. He says changes to the existing hospital represent a shift in philosophy from designing hospitals from the caregiver’s perspective. “We’ve involved the patients in the design process and we’re incorporating a lot of things that will make this an asset to them,” Kenley says.

The structure will be the first LEED-certified hospital in the city, says Donna Hess, project manager for Methodist Germantown, and includes LEED features like low volume toilets and shower heads. The hospital recycled 89% of the waste products from construction. Ed Scharff, associate principal and lead designer in the Memphis office of TRO Jung Brannen, which designed the project, says the project was designed to reach LEED silver status, but the hope now is to hit LEED gold. “The goal was to provide a relaxed, low-stress environment in keeping with the neighborhood feel of Germantown,” Scharff says. “We didn’t see it as a very high-tech, polished, slick building, but depending on where it finishes, it’ll be the first in the city.”

[Johnny Ryall]

Mercedes Benz of Memphis

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St. Francis Hospital - Bartlett



New hospital slated for further expansion with additional 4-story bed tower.

[Johnny Ryall]

International Paper Corporate Headquarters, Construction of the 11-story Tower III



One of East Memphis' Fortune 500 Headquarters

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Grove Park Center

Office Building / Retail, Size: 60,000 SF
The renovations to this property are complete, state of the art updates inside and out.

[Johnny Ryall]

St. Francis Hospital recently completed renovations to its emergency department and its Chest Pain Emergency Center, $11 million

[Johnny Ryall]

First Capital Center

The former Oak Hall Building in East Memphis is now the First Capital Building. Renovations to this 60,000 square foot building included interior work for retail and Class B office space, as well as the building’s exterior, which now features a new stone and glass facade. Also, this building contains "by invitation only" high-end jewelers.

[Johnny Ryall]

Baptist Memorial Hospital for Women

The only freestanding women’s hospital in Memphis and one of only a handful of such hospitals in the country. Baptist Women’s Hospital offers labor and delivery, gynecological surgery, a newborn intensive care unit (NICU) and the Comprehensive Breast Center and is a regional referral center for high-risk pregnancies, mammography diagnostics and urogynecology.

Baptist Women’s Hospital was one of only three hospitals in the nation the American Hospital Association recognized for its quality efforts. The Quest for Quality Prize™ honors organizations that are committed to enhancing quality of care, patient-centeredness, effectiveness, efficiency, timeliness and equity as the basis of a comprehensive, quality-oriented health care system and have made progress toward making this vision a reality that other hospitals can emulate.

[Johnny Ryall]

The Colonnade Building

90,000 S.F.

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The Lexington Condos & Racquet Club

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Renaissance Center

Eight story plus partial basement, 190,000 SF

[Johnny Ryall]

Today East Memphis is the largest submarket of Class A office space with very low vacancy, the actual center of Memphis business as opposed to Downtown alone, not the greater central business district (Memphis Medical Center, Uptown, S. Main Street, etc.). The East submarket (proper) has approx. 100 office buildings approaching 10 million square feet. This gives Memphis the distinction of being a "dual core" city. Although, Downtown & the historical central business district of Memphis still dominate with tourism, medical industry, sports & entertainment as it boasts 2 Fortune1000 corporate headquarters as well.

[Johnny Ryall]

Workers replacing four U.S. 63 bridges, soon to be U.S. Interstate 555 (Memphis-Jonesboro/ Paragould CSA [population=160,000]



the Jonesboro Sun | By Michael Wilkey

TYRONZA — Construction workers moving orange cones and white gravel into place are the precursors of things to come over the next two years as four bridges will be replaced along U.S. 63. Arkansas Highway and Transportation Department District 10 engineer Walter McMillan said workers with Robertson Contractors of Poplar Bluff, Mo., began work earlier this month. McMillan said the $7.3 million project will replace bridges near the Travelair Motel and a bridge, halfway between Tyronza and Marked Tree. From there, a bridge near Deckerville at the Poinsett-Crittenden county line and a bridge near Interstate 55-U.S. 63 will be replaced, McMillan said. McMillan, based in Paragould, said the Marked Tree-area projects will be completed first. “We will have detours,” McMillan said. “As they are working on one bridge, the traffic will be switched over to the other lane of traffic [on the 4-lane highway].” The detoured road will create a 2-lane road through the construction area, McMillan said.

Tyronza Mayor Marion Bearden said the project will make travel better throughout the area. “It is very much needed, but it will be difficult for the construction on such a busy stretch of highway,” Bearden said. Bearden said she has concerns over the narrowing of a road near the U.S. 63-Arkansas 149 exit because of the orange cones being placed. “You really have to watch it there,” she said. “I am just afraid about people who do not know the area.” Marked Tree Mayor Dixon Chandler said the construction along U.S. 63 near his community is needed. We’ll be glad to have it,” Chandler said.McMillan also discussed a related project — a proposed access road across the St. Francis Sunken Lands near Payneway. That work is now in its environmental study phase, and the bridge project is expected to be completed by late 2011.

[Johnny Ryall]

DeSoto County, MS Officials Eye I-269’s Potential



ERIC SMITH | The Daily News

Interstate 69 is dubbed the “NAFTA Highway” after the North American Free Trade Agreement because it will course through the central U.S. from Canada to Mexico, connecting the continent’s three nations. One of the highway’s key links is Memphis, where the road will intersect with I-269, a beltway that when complete will loop around the area’s outlying communities and provide easier access for vehicles – passenger and freight – traveling into or out of the region. The southern leg of I-269 will stretch for 30 miles across DeSoto County, prompting officials there to begin planning for the road’s effect on potential commercial real estate development. No one understands the importance of I-269 for the county’s economic development more than Jim McDougal, director of the DeSoto County Planning Commission, who has been thinking about this project for the past six years. McDougal envisions the DeSoto County portion of I-269 as more than just another road project that causes urban sprawl, although that is one of the chief concerns surrounding the highway. Instead, he sees the road as an “international trade corridor,” where local, regional, national and even global companies will set up shop by building their distribution centers, transportation hubs and office headquarters. “Obviously it is a tremendous complement to our transportation and logistics industries in the area, but I think it also presents enormous opportunity for us to look at being a location for North American corporate offices,” McDougal said. “We’re right in the center of this whole logistical corridor, and what could be a better spot for dealing with all the commerce in the entire eastern half of the country than right here?”

International opportunities
McDougal’s concept moved closer to reality late last year when the county’s board of supervisors issued a request for qualifications from planning, engineering and architectural firms to create a master plan for the international trade corridor. The study will examine a corridor that encompasses two miles north and two miles south of I-269’s length – 120 square miles or 76,800 acres. A selection committee received seven submissions and narrowed the list down to two teams, each composed of multiple planning and design firms from around the country. The DeSoto Planning Commission on Feb. 25 will recommend a team to the board of supervisors, which will announce the winning bid at its March 3 meeting. The selected team will be tasked with conducting the entire international trade corridor study – with creating the “next major economic and social and cultural development in the Mid-South,” McDougal said. “A highway will develop by itself whether we plan anything or not,” McDougal said. “With an international trade corridor, we have a special opportunity to become part of the whole international business conversation.” The goal, McDougal said, is to find the highest and best land uses for this mostly rural acreage that stretches through the middle of the fastest-growing community in the Mid-South. One advantage DeSoto County has, besides a favorable tax incentive program for businesses, is its proximity to areas where automakers are making investments and where other economic development has sprouted in recent years. “We’re sitting here right in the middle of the Toyota plant in Blue Springs to our southeast and the gaming industry to the southwest,” McDougal said. “We have an opportunity, because so much of our area is open and not developed, to see what kind of development we want to be there and to have a tremendous influence on it on the front end.”

Regional transformation
Though McDougal said he couldn’t yet put a price tag on the project, he has applied for several funding sources and is awaiting responses. Also, the master plan will be completed with the help of the Memphis Metropolitan Planning Organization (MPO), the regional transportation planning group that helps cities and counties plan for their infrastructure needs and secure federal and state transportation dollars. MPO transportation planner Paul Morris said the international trade corridor study is a smart approach to preparing for a project that could transform a regional economic landscape already centered on transportation, distribution and logistics. “Memphis, whether people realize it or not, is a very, very significant player in the trade of not only America, but around the world, especially in terms of freight movement,” Morris said. “Whenever you build a nice highway, there are always people who want to develop along that corridor. The real question is: We need a vision of how that highway should develop.”

Existing High Priority Corridor> Regional>
Soon to be comissioned