Economy:
The Atlanta Fed’s GDPNow running estimate for Q3 2026 shows growth around 3.7% annualized. The Philadelphia Fed’s Third Quarter 2026 Survey of Professional Forecasters projects real GDP growth of 2.5% for the quarter. The Conference Board’s September Consumer Confidence Index fell to 81.9, with both present-situation and expectations measures declining.
The Federal Reserve’s July 2026 Senior Loan Officer Opinion Survey indicated that banks left commercial lending standards basically unchanged and reported generally easier standards for commercial real estate loans. The Philadelphia Fed’s Q3 survey projects core CPI inflation at 2.7% annualized for the quarter, down from its prior estimate of 2.9%.
Demand:
Memphis recorded another quarter of positive absorption, with leasing activity showing signs of renewed momentum in several submarkets. Downtown experienced a positive quarter, with activity beginning to thrive as the area benefits from new investment and increased amenities. East Memphis is also expected to see improved activity in the coming quarter as deals currently in progress move forward.
Demand continues to be driven primarily by healthcare, professional services, and financial users, with tenants remaining selective in their space requirements. Four office buildings are currently being considered for future construction, signaling renewed development activity in a market where the last new office building was delivered in 2023.
Pricing:
The overall average asking rate remained essentially stable at $20.49 per square foot, increasing only slightly from the previous quarter. Pricing conditions remain competitive as landlords continue to prioritize occupancy and tenant retention.
Rates in well-positioned assets remain steady, though the market continues to push landlords to be more aggressive to attract tenants. Tenant improvement allowances continue to drive negotiations given current construction costs, with landlords offering higher TI packages often seeking longer lease terms to balance the additional upfront costs.
