huntsville AL

The 2015 Huntsville commercial real estate market performed well in the industrial and retail sectors. The office market, however, continued to lag, but it appears the worst might be over and some improvements should be seen by the end of 2016.

The industrial market vacancy rate fell to 7.60%, the lowest rate the Huntsville market has seen since 2008. The Polaris plant announcement (front cover) was great news for the area and has led to several new suppliers moving to the Huntsville market. The GE Aviation announcement should also help decrease the amount of industrial supply in the area.

The retail market remained active with several new retailers, including Cabela’s, Whole Foods and At Home, opening in 2015. The largest new development was the purchase of 200 acres from Intergraph Corporation for the planned Town Madison development. The biggest redevelopment transaction for the year was the purchase of the struggling Madison Square Mall.

Vacancy rates for the overall office market rose again in 2015 to 19.31%, while the multitenant vacancy rate increased to 25.03%. Class-A office buildings fared the slowdown well with vacancies remaining below 8%. Absorption was positive for the year, hopefully signaling that a slow recovery is beginning.

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HSV Graham Report 2016