Last year, Huntsville’s industrial vacancy rate fell from 12.3 percent to 11.6 percent, below the national 12.8 percent average, the report shows. The national average dropped 30 basis points in the fourth quarter of 2012, and has dipped 10 consecutive quarters since the rate spiked at 14.6 percent in early 2010.
For the first time since 2009, the report shows an absorption of industrial inventory in Huntsville due to more leasing by Jetplex-area defense firms, which are filling buildings previously operated by automobile companies. Despite new construction “for large industrial buildings being almost nonexistent” last year, the survey shows building for facilities in the 10,000-15,000 square foot range increased.
The Jetplex Industrial Park, which embodies 58 percent of the Huntsville industrial market and is the city’s largest industrial base, saw a 15.2 percent vacancy rate, a slight decrease from 2011′s 16.2 percent. In north Huntsville, the industrial vacancy rate fell to 8.1 percent from 10 percent in 2011, while the Chase Industrial Park saw 1.3 percent vacancy – down from 2.1 percent the previous year.
Vacancies in the Huntsville office market jumped from 8.7 percent in 2011 to 12.6 percent, the report said. Concerns about sequestration and a lack of defense spending hurt Cummings Research Park, which saw an increased vacancy rate of 8.9 percent from 4.5 percent a year earlier. Multi-tenant vacancy at the park rose from 9.6 percent in 2011 to 17.96 percent last year.
The report shows more than 2 million square feet of new construction on Redstone Arsenal for Base Realignment and Closure (BRAC) also impacted Cummings. The Huntsville vacancy rate is below the national 15.4 percent average, which fell from 16.4 percent in 2011. Experts believe the U.S. office sector will show slow improvements this year, the report said.
Downtown Huntsville vacancies rose slightly to 21.98 percent from 21.5 percent in 2011. In the retail sector, vacancy closed 2012 at 9.1 percent, down from 9.9 percent the following year. Despite continued backfilling of vacant retail spaces in Huntsville, the report shows more than 450,000 square feet of new retail development on or near 100 percent occupancy contributed to the dip in vacancy last year.
Jones Valley/Hampton Cove is the best performing retail market citywide at 2.53 percent vacancy, while the University West submarket has the highest vacancy rate at 14.83 percent, according to the report. National retail vacancy levels fell to 10.4 percent from 11 percent in 2011, showing signs of retail recovery.