Big River Market in Memphis, TN
Guest: Casey Flannery
Topics: Cushman and Wakefield, redevelopment
Transcript:
Chris Ressa 0:00
This is retail retold the story of how that store ended up in your neighborhood. I’m your host, Chris ReSSA. And I invite you to join my conversation to some of the retail industry’s biggest influencers. This podcast is brought to you by DLC management.
Hi everyone. I’m excited to announce on Sunday Night March 6, at 7:30pm I will host the live Ask Me Anything virtual event. I’m going to talk about all things commercial real estate and retail. Check out retail retold.com/ama For more details on how to sign up for the event, and submit your questions today. Join me on Sunday March 6 at 7:30pm. Eastern Standard Time. Sign up today at retail retail.com/ama for more information. Hope to see you there.
Welcome to retail retold everyone. Today I’m joined by Casey Flannery. Casey is an commercial real estate broker focusing on landlord rep in the office sector in Memphis, Tennessee. I’m excited for her to be here. Welcome to the show. Casey.
Casey Flannery 1:13
Chris, thank you so much for inviting me to be on the retail retold podcast. I appreciate you reaching out and I’m excited for our conversation today. So
Ressa 1:22
me too. So Casey, tell us a little bit more about you and
who you are and what you do.
Flannery 1:28
So as you mentioned, I primarily focus on landlord office leasing here in Memphis, Tennessee. This I’m entering my fifth year as a broker in the business I started. We’re an alliance firm with Cushman and Wakefield. So we are locally owned and operated here. In Memphis, I started about six, I don’t know seven years ago, maybe with the company I started as an intern. Then I became a full time permanent administrative and coordinator there. And then after two years doing that I transitioned on to the brokerage side of the business.
Ressa 2:03
Excellent. And so how many years is that put you exactly? making deals?
Flannery 2:09
I’m going into my year Firefox,
Ressa 2:11
obviously, last year was a crazy one. And the office industry, there’s a lot of headline news around Office, tell me what you’re seeing as it relates to office. It’s Yeah, it’s crazy. We’re just trying to figure it out, summarize what’s going on in office, in your world, your work? Yeah, here
Flannery 2:31
in Memphis, I think we’re really just starting to see the effect of everything. Our rates aren’t as high as someplace like New York or San Francisco. So the effect hasn’t been as large here in Memphis. And of course, being in the south, where we’ve mostly been open just with some masks mandates, but everything has been primarily open. Think occupiers of office space are still trying to figure it out or entering almost our year three in the pandemic. But I think our market is really starting to see the impact of folks downsizing by about 50%. But then again, there are some folks a little bit that are expanding slightly. But we’re just starting to see kind of the move outs the downsizing, maybe moving to a different location that’s a little bit more affordable, or groups that are downsizing and can now maybe move into a class a sort of product to get a little bit more bang for their buck, but they don’t have that large footprint that that that they have to pay on anymore.
Ressa 3:32
And are you seeing new occupiers enter the market who aren’t there, but they want office space,
Flannery 3:40
I think a lot of smaller groups like 700,000 square feet, I mean, where Memphis so big deals for us are 10,000 12,000 square feet, we did just do an 86,000 square foot deal. For office space, it took about 70% of the building. So that was really exciting to see in Memphis, it was a spin off of International Paper. So that was one of the largest deals that Memphis has seen in the past 510 years. So that was kind of a new to market, new user in Memphis.
Ressa 4:15
And what our occupancy rates like right now in Memphis in the office industry,
Flannery 4:20
we’re at about 14%. I think we’ve increased a little bit, maybe, maybe 1516. But it’s still remained about about 14 14%
Ressa 4:29
vacant,
not occupied Right? Or vacant vacancy. Okay. Yep. Yep.
But 85 86% occupied. Okay. And that was that was like, similar pre pandemic for Memphis?
Flannery 4:43
Yes. Yep.
Ressa 4:44
And is there any new construction? Are
you seeing new offices being built?
Flannery 4:49
We don’t see it often. A lot of what we see in Memphis is the redevelopment of older buildings. So for example, Well, the Gibson guitar factory museum that was downtown right across from a FedEx Forum, FedEx trade networks, which is believe FedEx logistics now redevelop that building into 150,000 square foot office. Okay. So Memphis sees a lot of redevelopment rather than new construction.
Ressa 5:19
Interesting might,
our CEO at DLC animation, he’s saying he said a lot that the future corporate office is going to look over the next 10 years, it’s going to look like a fancy hotel lobby. So big, you know, a lot of community areas collaboration, but to do traditional work, like get on your computer and go the office is really gonna be about collaboration, training and development connection points. And, you know, maybe less just emailing but so I always found that interesting, fancy hotel lobby, so we’ll see what the future holds. But okay, and you started something interesting called care chat on Twitter. Yes, tell told the world about care chat.
Flannery 6:05
So if you’re not familiar with care chat, my colleague, who I worked with in Memphis, and she eventually had moved to, to Nashville, we had started CRA chat, which is a live Twitter chat, it takes place on Twitter. So you just search the hashtag cre chat, and then you can see all the conversations we have that are happening. It’s in real time. It’s not like a live video communication. So everything’s done through tweets. So what we do is schedule a topic, we post and ask questions, and then participants respond with their answers, engage in conversations, and they use that hashtag cre chat as well. And we also started a podcast a follow up with a summary of just the topics that we’ve had. And we’ll be back on doing our podcast this year in 2022.
Ressa 6:59
Excellent. And the are these set times the CRE chat?
Flannery 7:09
Yes. So we do the CRE chats once a month, they take place on Thursdays one time per month at 7:30pm Central. So it really depends on what’s going on what topics important are kind of based off of which Thursday of the month that we do it, but we tried to promote it at least a week or two before the scheduled day. And
Ressa 7:34
it kind of took off how many people you know, are participating in one of these?
Flannery 7:39
Wow, like, Well, we started it in 2018. And read didn’t really know what to expect. But it has just grown so much. I think probably each chat has 20 to 30 participants live during that one hour period that we do it. And then there’ll be others who might have missed the chat that day they can go back and respond and see the conversations. There’s also a lot of people who may not interact, but also see the tweets. So I think every chat we I looked it up and I can’t remember now I think each chat we get like 10,000 to 20,000 impressions on our on our conversation.
Ressa 8:18
Incredible.
Well, if you’re not checking it out, people on here are either in retail, or they’re in commercial real estate, or listening typically. So if you haven’t checked it out, please do cre chat on Twitter.
Flannery 8:31
Yeah, yes, thank you. And we try to cover topics and ask questions that anybody can answer. So whether you’re a broker owner or marketer or researcher, we try to make sure everybody in commercial real estate can be involved in those. Excellent. Okay.
Ressa 8:46
I want the world to get to know Casey a little bit more. We have a section called Clear the air. I’ve got three questions for you. Are you ready? I’ll try my best right, here we go. Question one. When’s the last time you tried something for the first time?
Flannery 8:58
Um, good question. I like to say that I’m pretty open up to try new things. But one thing that I tried about a year ago that I’ve been consistent on has been walking my dog, I would say I’m not normally a walker, regular Walker. So that’s something easy that I kind of started doing October 2020, and have continued to do it. So I think that’s something new that I started to do and make sure that I do it and keep it in my schedule to do
Ressa 9:29
what type of dog do you have?
Flannery 9:30
We adopted a dog in the pandemic. He’s a great peer and he’s golden retriever mix.
Ressa 9:36
Interesting. And, boy girl,
Flannery 9:39
it’s a boy his name is Ali. He came with that adopted name and we never changed it. So we just kept it Ali.
Ressa 9:45
Very cool. Okay.
Go on it. Alright, question two. What is one thing most people agree with but you do not.
Flannery 9:53
Oh goodness. i Hello. I think that this question might be a little bit different. For the people listening, I would say one thing not necessarily agree with. And maybe one thing that I do different than a lot of other people around me in my area would be to utilize social media and beyond social media, there’s not very many other brokers or people in my market who who use it and who interact with others, I really think I was the first one to use it and use it regularly to, to kind of create a personal brand and, and get business. So that’s a little bit different than other people around me. But I know everybody that’s probably listening to this. It’s like, oh, yeah, like that. That’s like that. I’ll do that true.
Ressa 10:36
Absolutely. So not true. It’s still early in that. Okay. Question three. What is one skill you don’t possess? But wish you did?
Flannery 10:46
You know, I should probably give some of these some more thoughts more often? Ah, one skill that I don’t possess that I wish I did. You know, I’m not sure, surprisingly. And it’s something that I never really thought about myself. But I think I’m pretty organized. And I never thought or considered myself to be an organized person. Somebody just said one time, like I, you know, I noticed a lot of times, like, you take notes in meetings, and I’m like, oh, yeah, I guess I do. Because if I don’t, then I’m gonna forget something or forget everything. So I guess it’s just such a part of being organized, which, again, I would never consider myself to be an organized person. And maybe it’s happened the past five years or a few years. But I just thought I was kind of different about me that I never realized before.
Ressa 11:39
So well, if I so that’s a skill you have. Which when you don’t have that issue did?
Flannery 11:45
Oh, well, I don’t have I don’t know, honestly, I don’t know. I don’t know, what are some examples or some ideas. And I’d say if I wish I had it or not.
Ressa 11:57
We have the you know, people that are like second language. People are like, musical instrument artistic.
My answer is always photographic memory. Some people say patience. It’s all over the board. Someone said plumbing skills. I don’t know. We’re gonna come back to it. Okay, that’d be the last one at the end.
Flannery 12:21
I like the language on that’s pretty good. I can do that one. Okay.
Ressa 12:25
I want to move into a story. You have a story about a deal in Memphis? What’s the name of the business?
Flannery 12:35
The name of the tenant is Big River markets.
Ressa 12:39
Okay. So tell us about how big river market ended up where they did.
Flannery 12:43
I have a listing Downtown Memphis, it’s in an area that we refer to as South Main. So I started working with a gentleman that he did ticket sales for Live Nation. And as we know, concerts cease to happen during 2020. So I think I got my first phone call from him October or September 2020. And he had this idea to have a grocery store downtown and that South Main area, which Downtown Memphis is considered a food desert, so there’s not really any shopping or grocery shopping, you can do downtown, it’s just kind of void of, of grocery areas. So he was going to open a market deli shop area, which would solve the issue of a food desert and that area of downtown. So I started working with him. September October 2020. We began moving forward with proposals and plans he got his own architect and started John out plans and in there was a few times where we had to look at financing. So our Downtown Memphis Commission provides tenant improvements to new tenants looking to be downtown. And so there was a process of him getting that that financing and also, of course, him and I and the landlord coming to agreement on terms for his lease,
Ressa 14:16
and is it open yet? Or when does it open?
Flannery 14:19
It’s under construction right now. So it should be I would say about March when it would be complete.
Ressa 14:26
So how big is the building you have a listing on
where they’re going or biggest the whole building?
Flannery 14:35
The whole building is 60,000 square feet and Hill occupy about 2500 to 3000 square feet. And,
Ressa 14:44
okay. And so,
what did the when you took on this listing, why did you take on the listing, what did you like about the listing when you took it off?
Flannery 14:54
The building is it’s amazing. It’s a building, the REIT kind of going back to the redevelopment of buildings that we’re talking about. It’s what is the 1920s building. It has exposed exposed wood floors, it has exposed bricks on the interior. It’s just an old historic building. And it’s built out with the numerous 700 square foot spaces. That was a former incubator space for a nonprofit that’s in Memphis. So that building sold to a group and we began leasing it. I think I leased about 10 to 15 new tenants in that building, the first year I had up what type of
Ressa 15:37
tenants were going into the building, what type of uses what type? Was this, like? tech startups? What was this?
Flannery 15:43
No, not specifically tech, just individuals that owned their own, own their own businesses, there is some tech, there are photographers that are in the building it I also did another retail user, which was a bridal shop. So they relocated from East Memphis to downtown to that building, and the
Ressa 16:07
group that took it that
bought it and that you represent, what were they hoping to achieve with the building? What was there? Like? Obviously, they want to lease it out. But is there anything they had envisioned for it?
Flannery 16:20
Um, a building like that would get a lot of interest from users that would want to redevelop it into multifamily. So a lot of areas along that street, that area get converted to multifamily apartments,
Ressa 16:36
so but this group didn’t want to do that they decided to make it office and retail in this mixed use development.
So anything in
particular that they wanted to come out of this office or retail or they’re looking for? Or they did they call and tell you, hey, we want you know, FedEx to leave some space here. What did they have anything like that? Are they just looking to get spaces filled?
Flannery 17:07
Well, FedEx is already in the building. So they had about half a floor in the building. Their lease did expire at some point. So we had a lot of attraction for the smaller users, the startups, the entrepreneurs to to lease space where a lot of downtown options don’t have that unless you’re going to like a true co working space, like a like a Regis or we work or serendipity labs, we were sort of another option. And to capture those individuals that needed smaller space, we could be a little bit more flexible on our lease terms and some of the other property owners downtown.
Ressa 17:44
So you leased out this building, they normally would a converted it to multi this group decided they wanted to do keep it office mixed use with some retail.
And then along comes
River City Market. So what did you think when this when you first got the call to do a grocery store?
Flannery 18:16
One was, I’m not super familiar with retail projects to was, you know, let’s play it out and see what happens. Three, I don’t know how if my landlord or owners is going to go for it. So always want to make sure that giving everybody an opportunity, making sure it can work on both sides. And once my landlord is like, Yeah, let’s explore it. I’m like, All right, and let’s see if we can get them in there.
Ressa 18:44
And the space that he was turning into a grocery store. I imagine this was pretty cost intensive. What did the the expected cost of this something like this small grocery store 3000 P but still to convert, like what might be traditional office or even historic building office to grocery store is not cheap.
Flannery 19:07
I think it was right under half a million dollars.
Ressa 19:10
And so for this was a first time grocery store owner, right? This gentleman doesn’t own other grocery stores, right?
Flannery 19:20
He’s had some experience and some I guess mentors from another group that’s in Austin. So he’s originally from Austin. So there was some group that he was getting some insight from and having discussions with and learning from but but Yeah, he’d be the first first time grocery store and
Ressa 19:38
you connect him with
the city so that he could understand the type of improvement financing they would get, they would be able to give Where did he know that
going? Yeah, so
Flannery 19:51
he didn’t know it going in. I think our property either fell like right at the line or right within it or right out side of the boundary area. But he did know of the incentives that were offered by the Downtown Memphis Commission. I knew it as well. So I did bring it up. But he was already familiar with a lot of it, he had already started going through the process before the deal was even done. So it was pretty luckily that I had, you know, I was working with somebody who is really hands on and really knew how to move forward and wanted it to get done. And he was a big part and, and getting it done by being so hands on and being proactive, for sure that
Ressa 20:31
always helps. The other part of that equation that was I’m sure there was still some level of landlord work, or tenant improvement dollars that were part of the deal.
And I don’t know the credit behind the lease, if it’s just him on the lease, or there’s some entity that has a sizable net worth, like God is there’s probably a lot more personal exposure to him, then there is it’s not like, you know, Publix or Kroger or signing the lease there. So how did the landlord get comfortable with the first time operator pretty sizable investment into a small space, deploying those dollars, and
Flannery 21:15
he had a business plan right away, he had his mentors that weren’t necessarily his investors. He let us know the group that he was working with who have a pretty good reputation down in Austin. So we were familiar with the group he had been learning from and connecting with. So I mean, he had all of his ducks in a row, you could tell by the way, by the way, he works that he would be somebody reputable and good to work with lived in the area already being proactive getting plans drawn before we even had to deal with on working with the downtown to get his incentives before anything was done and submitting all that himself rather than depending on us for a lot of that. So it was just somebody that we felt would be good to have in the area in already getting press on opening the grocery store in the area really before the deal.
Ressa 22:12
Yeah, I saw a little bit I saw the press that you had posted on LinkedIn, I believe about this new grocery store. It looks really cool. I encourage everyone to go check it out big city market looks really cool.
The tell me about working with
him. I don’t know what his real estate negotiation experience was. But how was it getting to deal terms that you felt acceptable presenting to the landlord? How was that process? He was
Flannery 22:45
pretty open. Of course, as much ti as a tenant could get would be preferable. But eventually, the owner agreed to one of his counters and we had submitted an initial proposal to him and he responded, and of course trying to get as much ti dollars as he could. And I think it came back one time when we’re like this is already above market and ti like we cannot give give anymore. And you know, it wasn’t a large deal. It wasn’t 20,000 square feet, it was still fairly small, but that TI was over market and kind of once I said that to him, he was like, okay, like I get it. It was a lot. It was a long term deal. It was you know, 2035 You know, 3000 square feet, but it was long term deals. So
Ressa 23:36
is it a 10 year deal.
So impactful even though small nature size wise but impactful because it’s this, the owners didn’t envision a grocery store going in this building. And the this was in a food desert. So you know pretty impactful to the community.
Who do you or does the owner expect is the shopper in this grocery store?
Flannery 24:09
It is adjacent to our self bluffs development which has a residential homes it has multifamily. So it has about I think about 500 Plus residents right adjacent to it. It is self main area. So that’s it’s no longer up and coming I would say it’s already up and said there’s a lot of shopping kind of more on our self main district area. There’s a new movie theater. They’re one of our best restaurants in town, the arcade that’s historic. No breakfast diner that has been there forever, as well as Earnestine and Hazel’s if you’re familiar with that and and the soul burger. So it’s It’s really in a gray area of town and then just being adjacent to the south bluffs, apartments. Residential is really just a huge asset to attracting people that can walk, walk to the Deli Restaurant, grocery store.
Ressa 25:15
Very cool.
And it’s now under construction. And has there been any community noise around it? Like are the people excited that they’re getting a grocery store? Like, where were these people doing grocery shopping?
Flannery 25:32
Yeah, they would drive that out to get in their car and drive to a Kroger that probably take 1510 to 20 minutes, 15 minutes. But he really did his market research too. And since he did he does live in that South bluffs area. So he did a lot of market research on his own talking to individuals and I always know that there’s there’s pedestrian pedestrian traffic there because I’m always down there shown space and see people crossing and I’m familiar with the area. So he really did a lot of the market research and you know, just being in that South Main area. It’s just it was just, it just needed to be done. Excellent.
Ressa 26:17
Well, looking forward to seeing when this opens. And thank you for taking us through how the city market ended up in
Downtown Memphis in this food desert. Okay. I want to take you to the last part of the show. We call it retail wisdom. I got three questions for you. Are you ready? I’ll try question one what extinct retailer Do you wish would come back from the dead
Flannery 26:51
I was a big limited to so and I think then eventually kind of grew until what seal and dealios maybe I don’t know if dealios is still around it might be course and could not wear that stuff these days. But I remember really liking limited to and then limited I guess was for where I would be shopping now. Which isn’t around anymore, I believe. Next question.
Ressa 27:19
What is the last item over $20 You bought in a store?
Flannery 27:24
I always buy everything and I did my I did all my Christmas shopping in this store. I think the only thing I did online was making a photo book at Walgreens and getting to $10 items from Amazon that I needed last minute but definitely did all my Christmas shopping and
Ressa 27:43
just one item a massage Oh wow. That’s real item. Those are not cheap
Flannery 27:51
Bed Bath and Beyond. Those are cheap.
Ressa 27:55
But they’re fun to go in in the store. Yeah. Okay. Last question. Casey, if you and I were shopping at Target, and I lost you would I would I find you
Flannery 28:08
so surprisingly, I’m not a big top target shopper, but I have been going a lot lately. I I don’t know why I just started going but I always end up in the home goods bedding housing aisles since we bought a house right before the pandemic and it’s still not really decorated. So it probably be the home good.
Ressa 28:31
Understood. I know that world all too well. We’re always decorating. Well, listen, Casey, this has been great. Thank you for
being patient through the entire episode. Thank you for telling the story and telling us about cre chat. What’s your handle on social media so people can follow you and learn more?
Flannery 28:53
You can follow me at flan Casey FLANNC A sey. Also be sure to check out the hashtag cre chat and cre chat live on Twitter.
Ressa 29:06
Excellent. Well Casey, this was great. Thank you so much. Really appreciate it. Let’s stay connected. Anything I can do for you. Let me know.
Flannery 29:15
Awesome. Thanks so much. Appreciate it.
Ressa 29:20
Thank you for listening to retail retold. If you want to share a story about a retail real estate deal that you were a part of on our show. Please reach out to us at retail retold at DLC mgmt.com This show highlights the stories behind the deals from all perspectives. So it doesn’t matter if you are a retailer, broker, entrepreneur, architect or an attorney. Also, don’t forget to subscribe to retail retold so you don’t miss out on next Thursday’s episode.
I’m excited to announce on Sunday Night March 6 at 7:30pm. I will host a live asked me anything virtual event I’m going to talk about all things commercial real estate and retail. Check out retail retold.com/ama For more details on how to sign up for the event, and submit your questions today. Join me on Sunday March 6 at 7:30pm. Eastern Standard Time. Sign up today at retail retail.com/ama For more information, I hope to see you there