birmingham AL

After five straight years of overall positive absorption in the multi-tenant market, the market lost ground in 2015. With an oversupply of office/warehouse properties as the primary contributor, this sector posted almost 140,000 sf of new vacancy. Bulk distribution continued its trend of growth, but only posted a modest 77,000 sf of positive absorption in 2015. Rental rates decreased slightly over the previous year, primarily in the Central and East submarkets.

Single-tenant industrial buildings also posted overall negative absorption for 2015, however, nowhere near the levels of 2014. Birmingham continued to lag behind other Southeastern cities on the road to recovery from the economic downturn. The steel industry has been facing stiff global competition which has taken its toll on the local economy. Alternatively, the automotive sector continued to boom with Mercedes adding more vehicles to its production line, and several other carmakers including Hyundai and Aston Martin eyeing the state for new production facilities.

Nationally, interest rates have remained flat even as the Fed has now made its first .25% bump in 7 years. As unemployment rates have now fallen to levels comparable with the beginning of 2008, expect to see interest rates finally starting to rise in the first half of 2016.

As always, our successes correlate to the confidence from our relationships with our clients, vendors, investors and colleagues. Thanks for a good 2015 and we wish continued success for all in 2016.

Yours Truly,
Steve Graham, MAI, CRE
Mike Graham, CPM, SIOR

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BHM Graham Report Industrial 2016

BHM Graham Report Office 2016