MEMPHIS — Memphis real estate experts say the announcement of a Target online distribution center could indicate a shift in e-commerce that would benefit the region.
Target announced this month that it would locate a new online fulfillment center in Memphis, which will create more than 400 jobs. The 900,000-square-foot facility is expected to open by the middle of next year and will service the entire Southeast.
Patrick Walton of Cushman & Wakefield/Commercial Advisors told the Memphis Daily News that the announcement indicates that e-commerce distribution is finally making its way to the city.
Walton said such announcements have been occurring in other big markets for a while, but it's the first major one in Memphis.
"I think a name like Target, a top 50 name, can open up the lid on e-commerce that we haven't seen here yet but other markets have seen," said Walton, who represented the landlord in the Target deal. "This has been happening in the large markets across the country for a while, but this is our first major one and that is significant."
Memphis has a good geographic location and solid distribution and logistics infrastructure that could attract companies looking for a single national distribution center or those seeking secondary markets for regional distribution like Target.
"With Target, this isn't just our market being serviced, it's the whole Southeast," said Walton.
"I think what is happening here is this is more of a region-based e-commerce surge," he said. "Typically e-commerce centers are for same-day or next-day delivery and they're more market-specific, but Target is servicing the whole Southeast and it's not really a same-day delivery scenario and I think we could see growth in that area."
Memphis is "well-positioned" to attract more companies seeking an e-commerce distribution foothold in the Mid-South and Southeast, said Kemp Conrad, principal with Cushman & Wakefield/Commercial Advisors.
"What these e-commerce guys were doing first were building out distribution centers in the major markets," Conrad said. "What we believe will happen, and this Target deal bears this out, is that now that they've built out that first ring they're now building out their second concentric ring."