The Birmingham metro’s industrial real estate market had a banner year in 2017, absorbing over 500,000 SF of multi-tenant space, the highest amount of annual absorption throughout the past 10 years. The multi-tenant occupancy rate jumped 3.5% and is now approximately 94.0%. The multi-tenant market has become increasingly tighter; with only 900,000 SF of space is now available. The West submarket dominated the market in 2017, posting almost 332,000 SF of positive absorption. Single-tenant, freestanding, industrial buildings performed equally well, absorbing 2.5 million SF, and pushing the respective occupancy levels to a stable 95.5%, a 0.9% increase from 2016. The market’s development pipeline has continued to flow, with several new projects announced during the year, many of which pertain to the state’s thriving auto industry.
The local and global economies experienced steady to strong growth in 2017. Unemployment levels are at record lows, and businesses and investors are gaining more confidence in the market. The Fed seems committed to stepping up interest rates, with around three increases anticipated in 2018; however, stock market volatility could influence those decisions. On a local level, the city of Birmingham recently elected a progressive new mayor who is determined to move the city forward on all fronts, including economic development. We remain cautiously optimistic that the economy will continue to grow as we move into 2018 and further into the future.
As always, our successes correlate to the confidence from our relationships with our clients, vendors, investors, and colleagues. Thanks for a good 2017 and we wish continued success for all in 2018.
Steve Graham, MAI, CRE
Mike Graham, CPM, SIOR