huntsville AL

The 2013 Huntsville Commercial Real Estate Market performed well in the industrial sector but lost ground in the office and retail sectors.

The industrial market improved again in 2013 as vacancy fell to 10.03%. Several large blocks of space were leased in the first quarter by companies involved in the housing sector. This is a welcome sign as much of the sector’s
previous improvement was related to increased use by defense companies. The outlook for industrial looks positive for the area, as housing growth directly
impacts industrial usage.

Office market vacancy increased dramatically to 15.47% in 2013. Budget cuts and sequestration negatively impacted defense contractors that are so vital to the Huntsville market. The outlook for office remains cautious as defense
companies continue to be uncertain about future growth plans.

Vacancy rate for the retail sector increased to 10.27%, up slightly from 9.05% in 2012. Most vacancies are concentrated in older buildings or in one of the area’s large malls. Aggressive growth and new project announcements
continue in the Madison/Hwy 72 and Jones Valley markets. Retail should remain strong in 2014.

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HSV Graham Report 2013