Leveraging Crexi PRO has helped us market smarter, connect with qualified buyers and tenants, and close deals more efficiently with strong data and exposure behind every listing. Grateful for the partnership.

The new .25 rate cut offers strong potential for real estate improvements in the Memphis area, primarily through relief on borrowing costs, but it won’t resolve deep-rooted challenges like housing shortages that some politicians are saying Memphis might soon face. Why shortages?

• New Jobs: Google, Nvidia, Elon Musk, Grok, St. Jude’s Hospital, Neural Nexus, SK On, and other world-renowned names. The Digital Delta Initiative along with strong overall fundamentals from Medical, Logistics and other Memphis industry has the potential to create and IS creating thousands of new jobs. 
• Memphis Mayor Paul Young: has emphasized the city’s need for more quality rental units, noting limited new supply and new job growth. 
• Demand Dynamics: Lower interest rates will boost buyer demand, drawing sidelined investors back and supporting real estate prices for modest to strong growth.
• Supply Dynamics: On the supply side, the modest rate decrease is not enough to encourage most developers and builders to ramp up construction. 
• Broader Market Sentiment: Fed chair Jerome Powell warned that “housing is going to be a problem” in the US without policy tools to address supply constraints.
• Roadblocks to Construction: Rising prices of lumber, concrete, and steel along with new labor shortages.
• Market Cycle Investment: Market cycles reward investors who act BEFORE headlines bemoan supply shortages.

Just announced! Houston company plans to turn two blocks of downtown Memphis into a tech hub.

— Steve Woodyard, CCIM

Recently, we mailed out WRC updates—letters, postcards, emails of all of us—to clients and friends. I didn’t expect much beyond the usual replies. But then, I got the kind of response that stops you in your tracks.

A client from the 1980s gave me a call. His name is Seymour D., from Los Angeles, CA. Seymour is now 98 years old, still an active CPA, still driving in LA, and his wife of many years is doing well.

He had seen that both of my children, Worth and Grayson, have joined our firm and that we’re growing with two new brokers with years of experience. And then he said something that really hit me:

“You were about your children’s age when you sold my 200-unit apartment complex .”

Back then, Seymour was the savvy investor and experienced CPA from LA. And I? I was a young, green kid from Ole Miss by way of Arkansas—what some might call a redneck—trying to break into the apartment world in Memphis. I’d saved just enough from side jobs in high school and college to pay rent for a year and maybe afford a few dates on the weekends.  I had to make it work as there was no safety net.

Seymour took a chance on me. He was a huge part of my early success.

And now, decades later, he picked up the phone just to say hello. I was stunned. Grateful. Moved. It brought a tear to my eye.

Thank you for reaching out, Seymour. You reminded me how meaningful a simple connection can be—even after all these years.

Maybe this is our nudge to check in on someone who once made a difference in our own story. You never know what kind of joy it might bring back.

Memphis Multifamily Market Summary 2024-2025

The Memphis multifamily market is at a turning point. After a few years of rising cap rates due to higher interest rates and economic uncertainty, 2025 is shaping up to be the year when things start stabilizing.

Per Lawrence Yun, National Association of Realtors Chief Economist, Memphis will see a spike in rents and values in the next 12 months. 

Per CoStar, Crexi, and public data, Memphis multifamily cap rates hit ~6.8% in 2023, well above the national average, offering investors good investment opportunities. 

Higher borrowing costs forced sellers to adjust pricing, leading to slower transaction volume and more cautious investors and motivated sellers. 

But with interest rates expected to hold or slightly decrease in 2025, we may see slight cap rate compression by year-end and prices increasing. 


Supply & Demand Shifts

A wave of new Class A developments caused higher vacancy in luxury apartments, forcing owners to offer concessions.

Meanwhile, Class B & C properties have remained more stable, with strong occupancy and rent growth.

The Elon Musk new AI facility, Blue Oval City Ford Truck project, St. Jude’s $13 Billion expansion, Regional One Health’s new $1 Billion hospital campus, FedEx hub expansion are expected to bring tens of thousands of new jobs, increasing housing demand.

The Greater Memphis Regional Commerce has been hinting at several new huge projects coming soon but have yet to be announced.  Most are speculating that  more ancillary uses related to Musk’s AI like Dell Computer Company as well as more distribution related opportunities. 


Opportunities for Investors

Memphis is still an affordable, high-yield market compared to national averages but prices may not stay this low for long. 

Investors willing to buy at today’s higher cap rates could see strong returns if rates decline and values rebound.

Distressed asset sales may increase as some owners struggle to refinance at today’s rates creating some shortterm opportunites for cash buyers that move fast without requiring bank financing. 

2025 Outlook

Experts predict cap rates could dip slightly as rates stabilize.

Investors are positioning for a rebound, anticipating strong rental demand and long-term market growth.

Memphis remains one of the best markets for high-yield multifamily investment.

If you’re in the multifamily space, how are you adjusting your strategy for 2025?

Let’s talk about the opportunities ahead!

• Worth Woodyard
  Woodyard Realty Corp.
  901-767-1998
  worth@woodyardrealty.com