The expansion of Milo’s is one of the recent bright spots in Birmingham’s industrial market.
Brokers are seeing a few things in industrial real estate that they simply weren’t seeing a few years ago.
And those trends could mean decreased vacancies in a market that had an 82 percent occupancy rate at the end of 2013.
Out of 14.2 million square feet in the market, 2.5 million of that space was available for leasing or subleasing, according to Cushman Wakefield EGS’ Annual Market Report.
So far in 2014, the industrial sector has slowly chipped away at that total, and commercial real estate professionals don’t expect that slow and steady trend to change.
“I think it will continue to be steady,” said Ogden Deaton, a broker with Graham & Co.’s industrial team. “We’ve closed a couple of deals in the last three months.”
Deaton is a part of the team that is marketing the Kaiser Facility to international companies, a property that adds 1.7 million additional square feet to the market.
Even before news broke about the Kaiser property, Deaton said the atmosphere in the industrial real estate market was starting to become more competitive.
“We were seeing multiple offers on buildings, and we haven’t been seeing that,” Deaton said. “Folks are realizing business is moving forward.”
Deaton said he has seen positive absorption on leases as well.
A number of local companies have announced expansion plans in the first two quarters of 2014.
Vulcan Industries, a subsidiary of EBSCO Industries announced a $5.1 million investment in Moody that will expand its facility by 100,000 square feet.
Milo’s Tea Co. continued its rapid expansion in June by announcing a $13.1 million investment in its Bessemer plant that will add 29 new jobs.
Diversified Labeling Images will be moving its press from Homewood to Irondale this summer to occupy a 40,000 square-foot facility in the city.
Evonik Corp. announced in May it will add 25 jobs as it opens an innovation center for research and development of medical devices at its Lakeshore property.
While local companies are looking to expand, Deaton said there is action coming from outside of the region.
“The out of town companies are doing some deals too,” Deaton said.
Deaton said he remains cautiously optimistic about the future but believes Birmingham will see more positive growth in the second half of 2014.
[ Read article at bizjournals.com]