huntsville AL

The Huntsville commercial real estate market produced mixed results in 2012. Retail and industrial markets continued to improve, but the office market suffered a dramatic increase in vacancy.

The vacancy rate in the retail sector fell to 9.05%, well below the 12% vacancy rate of 2008. This decrease marks the fourth year in a row the retail vacancy has dropped, and the outlook for 2013 is continued slow growth.

The industrial market improved slightly as the vacancy rate fell to 11.62%. The driving force behind industrial growth has been increased demand for high-bay space by defense contractors in the Huntsville market. The outlook for 2013 is continued growth as the effects of the much-anticipated housing recovery begin to be felt.

Office market vacancy rose dramatically in 2012 to 12.55%. Most vacancy occurred in the Cummings Research Park (CRP) area, as looming defense cuts and sequestration negatively impacted the outlook of companies located in CRP. The 2013 outlook remains cautious as most companies await guidance from Washington DC on the budget.

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HSV Graham Report 2013