We hear this question a lot: “How is commercial real estate doing in Birmingham?” Many people assume our market is experiencing the same volatility seen in national headlines over the past few years. The reality is a bit different. Birmingham is actually a stable market. While we certainly feel broader economic shifts, our office sector has avoided many of the dramatic swings seen in larger metro areas and is gradually positioning itself for future growth. To set the stage, Birmingham’s office market consists of approximately 18.8 million square feet of multi-tenant inventory across five submarkets, four of which include Class A properties. Overall absorption for fourth-quarter 2025 totaled negative 35,336 square feet following a positive third quarter. However, the market still finished the year with 56,786 square feet of positive net absorption. Occupancy remained largely stable throughout the year, with the overall vacancy rate holding at 19.8 percent. Direct vacancy improved slightly to 16.6 percent by year-end. Leasing activity also remained steady across the market. In total, 640,255 square feet of office space was leased in 2025, representing an approximately 14 percent increase compared to the amount of office space leased in 2024. Class A transactions accounted for more than …
Birmingham’s retail market continues to show steady momentum as it moves into a new phase, defined by limited supply, strong tenant demand in key corridors and a growing focus on open-air, lifestyle environments. While higher interest rates and construction costs slowed new development activity over the past couple of years, Birmingham’s most established retail corridors have remained active. Well-located centers continue to lease space quickly, and redevelopment opportunities are beginning to reshape several of the MSA’s outdated retail properties. One of the defining characteristics of Birmingham’s retail landscape today is the limited availability of high-quality space in prime locations. Much of the vacancy that emerged during the pandemic has been absorbed, particularly in grocery-anchored centers and lifestyle-oriented districts. As a result, retailers looking for space in established corridors often face a fairly competitive leasing environment. Demand remains strong among quick-service restaurants (QSRs), boutique fitness operators, medical and service retailers and fast-casual and high-end dining concepts. Birmingham’s suburban growth corridors and mixed-use environments offer many of these advantages, allowing landlords in the most desirable centers to maintain strong occupancy while gradually pushing rents higher. Lifestyle centers Open-air lifestyle environments continue to set the standard for Birmingham’s retail landscape. The best example …
Conditions in Birmingham’s apartment market vary by submarket heading into 2026. Several recently completed developments downtown are still stabilizing, creating short-term leasing pressure, while suburban areas across the metro continue to see steady renter demand. Much of the new multifamily development in Birmingham over the past several years has been concentrated in the downtown core. As a result, many of these properties are still working through lease-ups. Marcus & Millichap research projects roughly 670 apartments will be delivered across the metro this year, with vacancy expected to hover around 6.1 percent and average effective rents near $1,302 per month. That level of supply has created temporary softness in parts of the downtown market. Some newly delivered communities are offering concessions during lease-up periods as owners compete for tenants. In certain cases, owners are choosing to refinance rather than bring assets to market while occupancy stabilizes. These conditions are typical when several projects deliver within the same submarket over a short period of time. Outside the city center, Birmingham’s suburban apartment submarkets continue to perform well. Cities including Homewood, Vestavia Hills and Hoover remain among the metro’s most stable suburbs. Shelby County cities, including Pelham and Alabaster, are also seeing consistent …
The Birmingham industrial real estate market has remained relatively resilient compared to many U.S. markets, but recent trends show a shift in demand patterns with recent softness in the distribution sector compared to growing activity from manufacturing users. Overall market fundamentals remain stable. Birmingham continues to benefit from disciplined development and historically tight vacancies. Multi-tenant leased vacancy has generally remained well below national averages, hovering around the 5 percent range in the first half of 2025. Rent growth remains positive at about 3.5 percent annually. Renewing or vacant second-generation rents strategically lag new construction rents by about 15 to 20 percent. The second-generation base rent range is $6 to $7.50 per square foot depending on size, location and quality. Distribution and logistics demand has softened in recent months. Following the surge of warehouse construction and demand during the pandemic, leasing activity slowed by 2025. Approximately 1.3 million square feet of speculative space was delivered locally in 2022 and 2023, with asking rents at about $8 per square foot. The early deliveries benefited while the last projects to deliver were slower to lease as the economy stalled in the post-pandemic Biden era. Presently, 109,000 square feet of first-generation space delivered in …
The Upstate South Carolina industrial market is at an inflection point — an expected condition in a maturing and evolving market. Similar transitions have occurred in prior cycles and have consistently required lease rates to adjust more rapidly than traditional annual market escalations. These adjustments are driven by a combination of factors, including supply and demand dynamics, construction costs, capital markets and broader economic conditions. Currently, construction costs are the primary constraint impacting new deliveries. The post-COVID development surge resulted in over 30 million square feet of speculative industrial construction, a portion of which has yet to be fully absorbed. Today, we are approaching pre-COVID metrics with roughly 6.4 million square feet of speculative inventory (delivered or under construction) and an overall vacancy rate of approximately 7.3 percent. At this level, certain submarkets are at the point where additional speculative inventory will be required to meet tenant demand. The challenge lies in pricing. Much of the existing vacant space was delivered under a materially different construction cost structure, resulting in lease comps that do not reflect today’s construction and land costs. While incremental rent growth has occurred, it has not fully bridged the gap between legacy pricing and the economics …
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Mid-Atlantic Retail Market Is Experiencing Methodical Growth
Retail real estate across the Mid-Atlantic is having a moment — but it’s a disciplined one. As fundamentals remain healthy in Virginia, Maryland and Washington, D.C., the region is seeing a notably more selective approach to retail growth. Years of limited new development, zoning constraints and rising construction costs have tightened supply, pushing owners, investors and municipalities to be far more intentional about what gets built — and where. Sources interviewed for this article point to the sustained demand for well-located shopping centers, such as those anchored by strong tenants, daily-needs retailers and dense surrounding populations.“Retail today is about durability,” states Mike Castellitto, chief operating officer of Broad Reach Retail Partners. “Assets that serve essential, repeat-use visitors continue to outperform and attract both tenants and investors.” Shifting consumer preferences in VirginiaFrom Washington, D.C.’s dense suburban corridors to fast-growing secondary markets, Virginia’s retail real estate landscape remains one of the Mid-Atlantic’s steadiest performers. The Commonwealth’s strongest retail fundamentals are often seen in Northern Virginia and select regional hubs like metro Philadelphia, Virginia Beach and Richmond, where household income growth and population density create robust demand. Jim Ashby, senior vice president of the Retail Services Group at Cushman & Wakefield | Thalhimer, …
Nashville’s retail market continues to outperform many peer metros across the Southeast, supported by steady population growth, a diversified employment base and a prolonged period of limited new supply. Despite broader economic uncertainty and rising operating costs, fundamentals across Middle Tennessee remain healthy, with vacancy holding near historically low levels. Tight conditions, leasing That strength is reflected in current occupancy trends. Retail vacancy throughout the region sits at approximately 3.6 percent, signaling sustained tenant demand within a constrained inventory environment. New construction has remained limited as elevated material and labor costs have pushed many proposed developments outside workable underwriting thresholds. As a result, existing centers, particularly well-located neighborhood and suburban assets, continue to capture consistent leasing activity. Core, emerging submarkets Demand remains strongest in Nashville’s core and established growth corridors, including Green Hills, Vanderbilt/West End, 12th South/Wedgewood-Houston, Charlotte Pike/Sylvan Park and the Cool Springs pocket of Franklin. These areas benefit from dense residential growth, strong household incomes and reliable consumer traffic, supporting above-average rent levels. At the same time, tightening availability and rising barriers to entry in the urban core have accelerated growth across surrounding satellite markets. Submarkets such as Lebanon, Clarksville, Murfreesboro and Smyrna have emerged as meaningful retail …
With office leasing and development, we’re always looking forward to the next big thing. Nashville’s office market is no exception to that. Sometimes no news is good news, though. That may be the case with the metro’s office development, where only four projects totaling 279,320 square feet were underway at the close of 2025 — 44.1 percent of which was preleased. At the beginning of 2020, Nashville’s construction pipeline was nearly 10 percent of its inventory size — the second-highest share out of any U.S. metro. Since then, 8.5 million square feet of office product has been delivered, and despite overlapping with a global pandemic, nearly 80 percent of it has been leased — underscoring the market’s appetite for quality office space. While that office space has not been absorbed as quickly as some had hoped, market trends and activity suggest that nearly 90 percent of it will be absorbed by the end of 2026, proving the Nashville office market’s resilience. As we approach the end of the first quarter, Nashville’s office market is off to a good start, despite some uncooperative icy weather. Although local tenants continue to lead occupancy growth, sizable multi-market requirements have continued to increase, pushing …
Mixed-use development across the Southeast continues to change and evolve. What was once as straightforward as building residential apartments located above a street-level retail component has become something far more sophisticated and intentional. Today’s mixed-use communities offer integrated, experience-driven environments where all elements of living, working, shopping, dining and recreation are thoughtfully curated, with connectivity as a primary focus. The North Georgia region, located approximately 40 miles north of Atlanta, is where residential demand is rising, incomes are growing and consumer preferences are changing. As these trends converge, developers seek the opportunity to create true neighborhood hubs in the area. The Crossing at Coal Mountain, located in Forsyth County, is a new 140-acre mixed-use destination by Atlantic Residential that reflects how development strategies are evolving in response to these market shifts. The project will feature walkable streets, activated green spaces, local dining, daily lifestyle services and a carefully programmed retail plaza alongside luxury homes being developed in partnership with national homebuilder Toll Brothers. Each of the project’s planned elements is designed to support a true live-work-play environment. Phase I of the project’s retail district is on track to open this year, positioning the development to contribute to the region’s broader …
How did The Fay hotel in Fayetteville, Ark., save $500,000 mid-construction? How are other apartment, office and mixed-use developments doing the same, across the construction cycle? Developers are increasingly turning to artificial intelligence (AI) to flip the script on the challenge of value engineering that often dumbs-down original design plans. Value engineering is almost a constant in the business: A project is designed and priced during the feasibility and entitlement stage but three, four or five years later when construction starts, prices have jumped while the budget is the same. And prices go up for many reasons, such as materials costs, labor costs or regulatory issues — even for import tariffs, as we’ve seen the past year. But maybe we’re blaming the wrong culprit in giving “value engineering” a negative connotation.Now it’s time for the procurement process to take its turn in preserving value and design. Saving despite tariffsProactive procurement led to a half-million-dollar savings for real estate investor/developer Dwellist at its Fayetteville project. Dwellist is transforming a decades-old motel near the University of Arkansas into The Fay, its first Motelier-branded property, a full adaptive-reuse. Recently, materials ordering was running into cost-overruns that risked putting the overall project over budget. …
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