birmingham AL

Absorption continued in 2014 with a substantial growth in bulk distribution absorption. The positive growth in occupancy was generally spread evenly over the various submarkets, but with a larger percentage increase in the East submarket. While other Southeastern cities are now chasing speculative developments, Birmingham is characteristically lagging. While demand has improved significantly, it has not proven itself as scalable and we are still seeing re-absorption of space that went vacant during the Recession.

Rental rates have remained basically flat, though annual increases are becoming routinely accepted by tenants. Low interest rates have continued to bolster our economy and, of course, changes at the Fed are coming, but at least a year or more away.

Occupancy levels improved in 2014 in the warehouse sectors, but tumbled in the freestanding industrial buildings, which showed negative absorption for 2014. This was due largely in part to the 1,800,000 sf availability of Kaiser Hangar Facility (see cover) and the 1,311,295 sf C&S Warehouse. Many of the large 2013 blocks of space have now been filled and choices for spaces of 50,000 sf and up are getting very scarce.

Transaction volumes for 2014 were very strong, and we expect a positive pace will continue into 2015. Still no new construction is expected in the near term.

As always, as we go to press, the successes of 2014 are a direct correlation to the confidence from our relationships with our clients, vendors, investors and colleagues. Thanks for a good year and we wish continued success for all in 2015.

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

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BHM Graham Report Industrial 2015

BHM Graham Report Office 2015