Graham Report
Birmingham's commercial real estate market posted a mixed but active first quarter in 2026. The industrial market maintained strong fundamentals at 91.3% occupancy across nearly 19.5 million SF of tracked inventory. The office market saw positive net absorption of 121,711 SF, though overall vacancy remains elevated at 20.1%. Graham & Company closed over $86.6 million in transactions across both sectors during the quarter, anchored by the $52.7 million Cross Dock Distribution Center sale in Opelika.
Birmingham's industrial market held steady in Q1 2026 with an overall occupancy rate of 91.3% across the tracked inventory of nearly 19.5 million SF. The Central submarket led performance at 94.4% occupancy, followed closely by the East submarket at 93.5%. The Oxmoor and Southwest submarkets represent the softest pockets of the market, both carrying vacancy above 12%. Bulk distribution space accounts for over 80% of the tracked inventory and continues to drive overall market dynamics.
| Submarket | Total SF | Vacant SF | Occupancy |
|---|---|---|---|
| Central | 4,865,604 | 273,535 | 94.4% |
| East | 2,310,356 | 149,240 | 93.5% |
| South | 4,293,985 | 342,170 | 92.0% |
| Oxmoor | 4,506,766 | 526,522 | 88.3% |
| Southwest | 3,553,058 | 415,133 | 87.4% |
| Total | 19,529,769 | 1,706,600 | 91.3% |
The Birmingham office market recorded net positive absorption of 121,711 SF in Q1 2026, driven primarily by the Highway 280/I-459 corridor which absorbed 137,822 SF. Midtown continues to command the highest rents at $28.24/SF and maintains the tightest vacancy at 8.9%. The Southern and Vulcan/Oxmoor submarkets experienced negative absorption, giving back a combined 75,506 SF during the quarter. Average quoted rates across the market stand at $23.59/SF.
| Submarket | Vacancy Rate | Avg. Quoted Rate | Q1 Absorption |
|---|---|---|---|
| Highway 280/I-459 | 26.1% | $22.90 | 137,822 SF |
| CBD/Downtown | 23.6% | $23.11 | 17,076 SF |
| Vulcan/Oxmoor | 23.0% | $17.53 | (34,827) SF |
| Southern | 19.2% | $20.46 | (40,679) SF |
| Midtown | 8.9% | $28.24 | 42,319 SF |
| Overall Market | 20.1% | $23.59 | 121,711 SF |
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