2021 Graham Industrial Market Survey
Despite the turmoil and uncertainty brought on by the COVID-19 pandemic during 2020, Birmingham’s industrial real estate market has endured. Single-tenant & multi-tenant properties are both more than 95% occupied and there is during a historically low amount of space available in the market.
Average rental rates grew by 5% over the past year with no immediate signs of slowing. The South submarket was the top performer in terms of absorption in 2020, taking back 288,000 sf of vacancy. The West submarket also had a noteworthy year with 2.85 million sf of new construction completed, plus an additional 2.5 million sf of new construction announced, much of which has already broken ground.
2020 could be best described as an economic rollercoaster. After 128 months of economic expansion (the longest in US history) with record-low unemployment, steady GDP growth, and healthy inflation levels, the coronavirus and resulting stay-at-home orders changed everything. The stock market crashed, an unfathomable 20.5 million jobs were lost in April alone, and consumer spending took a nosedive. After months of lockdowns and multiple cash infusions into the economy in the form of stimulus payments and PPP loans, eviction moratoriums, and vastly expanded unemployment benefits, signs of economic recovery began to come to light during the second half of the year. By year end, the stock market was nearly back to pre-pandemic levels, the housing market was booming, consumer spending had almost completely recovered, and the unemployment rate was back down to 6% from a high of nearly 15% in April. Only in time will we fully understand the long-term consequences of the pandemic and our response to it. Uncertainty regarding future interest rates and inflation will persist as federal COVID-relief programs are rolled back. We are optimistic that our economy will continue to stabilize in the near-term as the world reopens.
We are extremely grateful to our clients, investors, vendors, and colleagues – our successes directly correlate with your continued confidence and trust placed in our team at Graham & Company. We look forward to serving you and remain committed to helping you achieve your real estate goals in 2021 and beyond.