Memphis, TN Retail Market Report Q3 2026
Cap Rates Rise 18 Quarters Running; Vacancy Rises to 4.6%
Demand
Memphis posted net absorption of -127K SF in Q3 2026, against -68K SF in the same quarter last year. Vacancy is 4.6%, 67 bps looser than Q3 2025. Benton County is the tightest submarket at 0.0% vacancy; Germantown leads rent growth at +2.3%. Trailing-12-month absorption of -427K SF compares with -76K SF a year earlier. Asking rent of $16.67/SF is up 1.0% year over year and within 1% of the Q2 2026 peak of $16.77/SF. Vacancy sits 123 bps above the Q4 2022 low of 3.4%.
Supply
Memphis delivered 103K SF in Q3 and 302K SF over the trailing twelve months (-15% versus the prior TTM period). Space under construction equals 0.2% of inventory, concentrated in Crittenden County at 2.6% of its stock. Annual deliveries peaked at 3.23M SF in 2004.
Investment Market
Memphis recorded $0.4B in sales over the trailing twelve months, -1% against the prior TTM period; Q3 accounted for $132M. The high-water mark in this series is $0.6B in 2021.
Memphis cap rates average 8.28%, up for 18 straight quarters. Pricing sits at $159/SF, higher for 8 consecutive years. The cap rate is 62 bps above the Q1 2022 low of 7.66%.
Volume
- $0.4B TTM volume (-1% YoY)
- Q3 2026: $132M
- Series peak $0.6B (2021)
Pricing
- Cap rate 8.28%
- Price per SF $159
- Caps expanding 18 quarters running
