2020 Graham Industrial Market Survey
Continuing the trend from 2018, the Birmingham metro’s overall industrial real estate market experienced slight negative absorption for multi-tenant properties and modest positive absorption for single-tenant buildings in 2019. Multi-tenant occupancy rates dipped by less than 0.5%, with an average rate of 92.8% at the end of 2019. Single-tenant occupancy remained static at 95.5%. The Western submarket was the top performer of the year, posting 147,500 sf of positive absorption. Rental rates experienced continued upward pressure, especially in the office warehouse sector, which increased by nearly $0.50 per square foot.
As we enter a new decade, the US economy is in its 11th year of economic expansion, the longest in history. Despite a general consensus that a recession was eminent in 2019, GDP experienced 2% annual growth, earnings growth beat expectations each quarter, 10-year treasury dipped to a record low of 1.47%, and the country continued to experience record low unemployment rates. Consumer confidence was strong in the first weeks of 2020, however uncertainty levels are rising amongst investors as the COVID-19 virus begins to spread around the globe. It remains to be seen how this election cycle will impact the economy, but some pullback is anticipated during the second half of 2020 as investors wait to see how the political landscape unfolds.
As always, our successes correlate to the confidence from our relationships with our clients, vendors, investors, and colleagues. Thanks for a good 2019 and we wish continued success for all as we enter the new decade.