Even in the face of a national foreclosure crisis, downtown’s dependence on residential development might help it weather the current recession.
Due to the economic downturn, commercial vacancies are rising rapidly across the country. Most major cities have commercial vacancy rates of 10 percent or greater, and the Urban Land Institute predicts that 2009 will be the worst year for commercial real estate markets since the early ’90s.
But Center City Commission head Jeff Sanford says that downtown Memphis, which has a commercial vacancy rate of about 15 percent, is “in a good position to ride out the economic storm.”
“[Downtown] is one of the fastest-growing residential neighborhoods in Memphis, and it is not only the center for sports and entertainment in the city but also in the region,” Sanford says.
Downtown currently houses businesses with about 65,000 employees. Sanford also notes that there are $3 billion worth of construction projects currently under way, including the Beale Street landing, Hotel Indigo on Jefferson, and the University of Tennessee Baptist Research Park.
When those projects are completed, “we will only have done about 40 percent of what needs to be done to complete the downtown turnaround,” Sanford says.
Already, however, downtown has changed. Downtown resident and blogger Paul Ryburn moved into the area seven years ago.
“When I first moved here, most of Main Street was vacant,” he says.
But Ryburn is optimistic about the effect of the economic downturn on downtown.
“People [who live downtown] are generally doctors, lawyers, and those who have corporate jobs at FedEx,” Ryburn says. “Not a lot of teachers, artists, and musicians [can] afford to live in the downtown core and South Main area.”
He speculates that the economy will eventually produce lower rents for downtown apartments.
“It’s making downtown more diverse,” he says.
