Memphis Office Figures Report Q3 2026

The Memphis office market recorded 14,400 sq. ft. of positive direct net absorption in Q3 2026, marking a modest improvement in occupancy despite a rise in direct vacancy to 17.6% from 17.1% in the previous quarter. The increase in vacancy was largely attributable to the completion of the 120,000 sq. ft. Northside Square renovation, which expanded market inventory. Class A vacancy similarly increased from 16.2% to 16.8%, though the segment continued to outperform the broader market with 55,700 sq. ft. of quarterly absorption. Occupancy gains in the North, Northeast, Downtown, and Midtown submarkets helped offset losses elsewhere. Asking rents continued to trend upward, with the market average reaching $21.45 per sq. ft., up from $21.29 per sq. ft., while Class A rents increased to $23.37 per sq. ft. from $23.26 per sq. ft.

The broader economic environment continues to provide a mixed backdrop for office occupiers. Business investment and a generally stable labor market are supporting economic growth and tenant decision-making, while elevated interest rates, higher operating costs, and ongoing geopolitical uncertainty continue to influence corporate real estate strategies. For office landlords and investors, higher borrowing costs remain a constraint on transaction activity and new development. Looking ahead, the market’s active tenant pipeline of more than 650,000 sq. ft., combined with positive quarterly absorption, suggests occupancy conditions could gradually improve if current leasing requirements convert into move-ins during the coming quarters.