The local industrial real estate market is stable heading into 2017, and several more deals could close before this year is over.
Jack Brown of Graham & Co., who spoke at the CCIM/NAIOP Central Alabama Symposium last week, said Birmingham’s industrial market is strong, with most statistics showing a stabilization or improvement over 2015.
Experts have previously said that a number of big economic development deals, particularly in the automotive manufacturing industry, helped put the Magic City’s market on better footing.
Those transactions include the sale of the property for Project Sunrise – a yet-to-be-announced economic development project expected to create nearly 750 jobs. The project is also expected to result in additional suppliers to the unidentified company coming to metro Birmingham, which would further boost the market.
Brown said he expected to see some positive trends from a statistics standpoint, but that the report didn’t quite match the level of the how the market felt from a brokerage perspective this year.
Even still, the multitenant occupancy rate in the Magic City is 88.3 percent, up from 87.9 percent in 2015. The market absorption is at 250,098 square feet, compared to negative 60,960 square feet at the end of 2015.
There have been seven leases of more than 50,000 square feet in 2016, and Brown said there are a few more that could close before the year ends. There were eight leases of more than 50,000 square feet in 2015.
There were 23 industrial sales of more than 30,000 square feet this year, compared to 20 in 2015.
Investment sales of industrial properties also had a good year, Brown said.
In 2017, Brown said he expects a continuing tightening of available space, and increased rental rates.
There should be more build-to-suit opportunities, but no speculative industrial development yet. He said to expect continued national investor interest in industrial properties, as well.