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, Tennessee is experiencing an economic transformation unlike anything seen in recent decades. Driven by an unprecedented wave of corporate investment, the city and its surrounding region are becoming a magnet for high-tech, healthcare, manufacturing, and logistics companies. This surge is translating directly into thousands of new jobs—and a rapidly growing demand for quality housing.

Massive Job Creation Is Fueling Population Growth

Over the last five years, more than a dozen major employers have announced plans to create over 15,000 new jobs in the greater Memphis area. These aren’t just any jobs—they span sectors that offer stability, high wages, and long-term growth potential. Here’s a snapshot of what’s driving this boom:

• Ford’s BlueOval City is leading the charge with a $5.6 billion electric vehicle and battery manufacturing campus that will employ over 5,800 workers by 2025. Supporting suppliers, like Korea-based ALUKO Group, are adding hundreds more jobs to the ecosystem.
• Amazon, already a household name in logistics, is investing further with a new Memphis hub, bringing in 3,000 jobs with strong starting wages and long-term employment potential.
• High-tech innovation is gaining ground too. Elon Musk’s xAI is building the world’s largest supercomputer here, promising over 300 high-paying jobs. Google is launching a $3 billion data center in nearby West Memphis with another 300+ jobs, while Supermicro and Dell Technologies are expanding their infrastructure capabilities in the region.
• The healthcare sector is also booming. St. Jude Children’s Research Hospital has committed to a $13 billion expansion that will bring thousands of jobs, while Regional One Health is planning a $1 billion medical campus on Union Avenue, modernizing and expanding care—and job creation—in the city’s core.
• Additional companies like AAON Inc., Hyosung HICO, Prospero Health, and Reconext are collectively creating thousands more skilled and entry-level positions across Memphis.

A Once-in-a-Generation Opportunity for Housing Developers

This explosive job growth is creating a perfect storm for apartment investors. Many of these projects are already under construction or nearing completion, meaning the influx of new workers is imminent. Memphis will soon face a sharp rise in demand for modern, well-located apartments—especially for professionals relocating from outside the area.

The current housing inventory in Memphis is not equipped to handle this population surge. With median home prices still affordable and cap rates more favorable than national averages, investors have a narrow window to capitalize on what could be the most significant economic expansion the city has ever seen.

Key Investment Advantages:

• Strong Rent Growth Potential: As job creation outpaces new housing supply, rental prices are projected to climb steadily.
• Diverse Employment Base: Jobs span manufacturing, healthcare, tech, and logistics, reducing sector risk.
• Strategic Location: Memphis is a logistical hub with strong transportation infrastructure, enhancing long-term growth.
• Favorable Economic Conditions: Tennessee has no state income tax, a low cost of living, and pro-business policies.

Conclusion: Memphis is Not Just Growing—It’s Exploding.

From billion-dollar EV manufacturing to cutting-edge AI and healthcare innovation, the Memphis region is redefining its economic future. For apartment investors, the opportunity is clear: act now to acquire or develop multifamily properties that will soon be in high demand. Memphis is no longer a secondary market—it’s a rising star in America’s growth story.

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

By Blaise Tomazic

CoStar Analytics

January 15, 2025 | 3:26 P.M.

The multifamily market in Memphis, Tennessee, ended 2024 on a high note, with annual apartment demand outpacing supply for the first time since 2021. And with a slowing construction pipeline anticipated, rent growth and vacancy are expected to improve in 2025.

Increasing demand saw net absorption — the difference between move-in and move-outs — reach 1,700 units last year, an improvement from negative 800 in 2023 and the third-highest amount in the past 10 years.

At the end of the year, the vacancy rate in Memphis was 13.6%, a 30-basis point improvement from the prior year, as commercial property segments saw vacancy decline across the board.

The multifamily market broke a two-year streak of declining demand, which saw its vacancy rate rise by 460 basis points from the beginning of 2022 through the end of 2023, peaking at 13.9%.

The largest increase in demand occurred among one- and two-star properties as consumer sentiment continued to rise and the pace of inflation slowed. These properties totaled just over 400 units of absorption in 2024, a large improvement from negative 700 units the previous year. This rise in demand pushed the vacancy rate among these properties down to 15.9%, a 140-basis point improvement from 2023’s year-end number.

Along with rising demand was a slowing development pipeline. High borrowing costs and tighter lending requirements limited the number of units under construction in Memphis at the end of 2024 to 1,400, a five-year low. As a result, 2025 is expected to see a decline in completions by about 25% from 2024’s level.

Despite improving demand, rent growth in Memphis continued to lag the national average. In 2024, rents increased 0.1%, the lowest level in the past 10 years, compared to 1% for the national average. The three-star property segment saw the most rent growth, at 1.5%, while the one-and-two-star segment and the four-and-five-star cohort posted annual declines.

With about 1,300 new apartments projected to open this year, slowing development will ease some of the supply-side pressures from the past two years. As a result, the apartment market’s vacancy rate will likely decline throughout the year as demand is expected to rise.

— Steve Woodyard

Partnering with Give901 and cityCurrent, Woodyard Realty was proud to award scholarships to outstanding students and professionals in Memphis once again this year.

Click below to read Anjessica’s story:

Not only can it effect the value of your property, but it could affect the amount of loan you can get on the property. 

Quick example:

Let’s say your property brings in $2,534,260 in gross income and your total operating expenses are $1,429,286.  This leaves what the apartment industry calls the Net Operating Income of $723,565.

The Net Operating Income is the number the appraiser uses to value your property when using the income approach to evaluation. 

The appraiser will then apply the appropriate Capitalization Rate to that Net Operating Income to indicate the value of that particular property.

The capitalization rate is a fancy way of saying “the return the investors want to make on their money before debt” for that particular asset. 

So, in the example above the NOI was $723,565 and the rate of return required by investors was 6.5%.

Then the value would be around $11,131,769.

Now lets say the management staff works hard and reduces expenses, improves collections, and the NOI goes up to $958,100. Now your property is worth $14,740,000!

Therefore, small changes can dramatically effect the Value. 

Let us know if your staff would like a one hour or less presentation on this subject to help everyone understand the impact of small changes!

Have questions about YOUR property? Call us!

We’re looking forward to serving you in 2024!

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