Alabama

Diverse Population, UAB Help Retail, Restaurants Expand in Birmingham

by John Nelson May 21, 2018

It wasn’t until the last five to seven years that college graduates started looking at Birmingham as a place to live and work. Cities like Nashville and Atlanta were getting too expensive and too congested. Upon discovering how progressive Birmingham has become with the revitalization of the downtown area, it became the new hot place to live, play and work. So what was once an untapped market has started to grow with new retailers and restaurants to meet the growing demand. The addition of Topgolf to downtown Birmingham, for example, would not have happened without the influx of new multifamily projects in the downtown/southside area. Birmingham has also seen a growth of new restaurants to the area because of the diversity of population. The number of medical and undergraduates students studying at the University of Alabama-Birmingham (UAB) Medical complex has contributed to the diversity. As such, restaurants and retailers that cater to this diversity have begun to open in the area. The Pizitz Food Hall is a prime example as it includes two restaurants and 12 food stalls serving cuisines from all over the world, including Italian, Israeli, Ethiopian, Japanese, Vietnamese, Indian and traditional Southern soul food like fried chicken …

May 21, 2018

Alabama Market Reports Multifamily Southeast Southeast Market Reports

Birmingham’s Multifamily Market Sees a Turnaround in Highway 280 Corridor

by John Nelson May 14, 2018

Birmingham’s multifamily market closed out 2017 with an average 7 percent vacancy rate and effective rents that flirted with the $900 per unit ceiling. On the investment side, multifamily assets in the market demonstrated some notable pricing trends through year-end 2017. The market outperformed the region and the nation in terms of value appreciation on a per unit basis. The average price per unit in Birmingham increased by more than 20 percent from fourth-quarter 2016 to fourth-quarter 2017. And, among these assets, garden-style properties stood out with a 36 percent increase in average price per unit. One explanation for this trend is the combination of value-add upgrades to garden-style properties in the market, as well as new construction that is lifting values in the market. To that end, Birmingham’s Highway 280 Corridor makes for a great case study. Stabilization of 280 Corridor What was a soft submarket in 2017, the Highway 280 Corridor in Birmingham has now rapidly tightened up in the first quarter of 2018. This one corridor spans various Birmingham submarkets ranging from urban Central City and Southside to Birmingham’s southeastern suburbs of Meadowbrook and Lake Purdy. According to Alabama Traffic Data (ATD), the average annual daily traffic …

May 14, 2018

Alabama Market Reports Property Type Retail Southeast Southeast Market Reports

Multifamily Projects, Experiences Redefining Birmingham’s Growing Retail Market

by John Nelson May 7, 2018

It’s no longer a secret that Birmingham and its surrounding communities are confidently moving forward, bursting with festivals, arts, concerts, parks, reimagined spaces and a red-hot local dining scene. These revitalized spaces represent opportunities to find affordable housing, a vibrant social life and a place where all can participate in the community’s ongoing progress. Tourism is also on the rise, with a 50 percent increase in expenditures over the past 10 years as visitors flock to the region to dine at the restaurants of culinary legends, cheer on Minor League Baseball teams in a downtown stadium, attend the Sidewalk Film Festival, watch IndyCar racing at the Barber Motorsports Park, visit the historic Civil Rights Museum and enjoy live music venues throughout the area. With all of its history, charm and new amenities, Birmingham is no longer a pass-through; it is the destination. The greater downtown Birmingham area experienced a 40 percent increase in its multifamily inventory in 2017, which is nearly three times the amount added in 2015. These spaces are filling up quickly as the submarket’s occupancy rate is currently at 92.5 percent and climbing. Everyone from millennials who are marrying later and waiting longer to buy homes to …

May 7, 2018

Alabama Market Reports Multifamily Southeast Southeast Market Reports

Job Growth, Limited Deliveries Elevate Birmingham Apartment Market’s Outlook

by John Nelson June 26, 2017

Urban submarkets have largely carried the Birmingham multifamily market’s recovery. However, going forward investors will look to capitalize on greater yields in suburban submarkets. Despite rising rents, absorption continues to climb and concessions are falling off. Greater absorption metrics will be a recurring theme this year as rising construction costs and tightening access to capital constrain new development. Supportive Economy Birmingham’s economy added 8,000 net jobs year-over-year as of December 2016, growing at an accelerated rate of 1.6 percent. Further, unemployment remains low at 5.4 percent. Industries such as transportation, education, healthcare, government, and finance are at the forefront of job growth in the market, accounting for 75 percent of the net jobs added. Moody’s projects that the metro will add more than 24,000 net jobs through 2020, expanding by approximately 4.7 percent. Recent expansion announcements in the market reaffirm this trend, including the Project Sunrise deal that will create 746 manufacturing jobs via a $120 million investment in the former Meadowcraft facility. Another needle-moving deal is Mercedes-Benz U.S. International’s $1.3 billion plant expansion in Vance, which has resulted in automotive suppliers growing their footprint in the market. For instance, Eissmann Group Automotive recently added 200 jobs in nearby Pell …

June 26, 2017

Alabama Industrial Market Reports Southeast Southeast Market Reports

Automotive Users Put Birmingham’s Industrial Market in the Fast Lane

by John Nelson June 19, 2017

When comparing Birmingham’s industrial market to other major cities in the Southeast, “The Tortoise and the Hare” comes to mind. Birmingham has had slow and steady progress — not to say that our sister cities have periods of laziness and napping. Birmingham’s current pace of activity is more the norm and thankfully the trends remain positive with 2016’s transaction numbers actually tilting in the direction of a “hare-like” pace. Occupancy rates for the 15 million-square-foot, multi-tenant industrial market eclipsed 90 percent for the first time since 2005. We had positive absorption of over 400,000 square feet with just under 1.5 million square feet of inventory remaining. During 2016, 12 new lease transactions of 50,000 square feet and larger were completed, eight of which were automotive related. These 12 transactions compare to seven and eight in 2014 and 2015, respectively, which is a strong increase. Leases of note include 270,600 square feet to a third-party logistics provider for Mercedes-Benz; 240,240 square feet to Grupo Antolin, a Spanish-based supplier of interior parts for Mercedes-Benz; and a 225,496-square-foot lease directly with Mercedes-Benz. Much of the remaining 1.5 million square feet of inventory is Class B or lower quality, so finding suitable space has …

June 19, 2017

Alabama Market Reports Office Southeast Southeast Market Reports

Consistency, Young Talent Lead to High Expectations for Birmingham Office Market

by John Nelson June 12, 2017

For the first time in quite a while, the Birmingham office market has experienced a rejuvenation and resurgence, catered around growth, a diversification of the tenant base and an effort to attract and retain bright young minds. Like many markets nationally, the city’s focus on urban renewal has made downtown Birmingham an attractive place to live, work and play, and thus will help companies attract talent to the market. Birmingham has entered a new era of industry and residential growth with one of the Southeast’s most dynamic markets after evolving from a historically steel and manufacturing-focused economy. Driven by a new generation of local leaders who have focused on developing biotechnology, life sciences and automotive sectors as catalysts for growth, Birmingham has witnessed a remarkable economic transformation. A preference for dynamic locations to live, work and play is occurring in Birmingham, as a significant amount of development has taken place in downtown Birmingham. While the bulk of this activity is occurring on the multifamily side, the same factors that draw people to live downtown are expected to positively impact the desire of employees to work downtown. In the long run, it is reasonable to expect office development to take off …

June 12, 2017

Alabama Market Reports Retail Southeast Southeast Market Reports

Retail Activity Leads the Way in Birmingham’s Revitalization

by John Nelson May 30, 2017

The Birmingham retail market had an explosive 2016. Several large projects were announced or completed, while traditional indicators of market health also showed promising signs of growth. TopGolf will soon be coming to the Uptown District, while Regions Field, home of the Birmingham Barons minor league baseball team, continues to attract surrounding development. Breweries remain a mainstay in Birmingham’s social scene, and they have demonstrated a capability to revive entire neighborhoods. As the natural beauty of Alabama becomes more important to residents and newcomers, the Red Rock Trail System’s green space bicycle system, which encompasses over 200 miles of green space trails and over 600 miles of street-based paths connecting all corners of the Birmingham area, will continue to grow in importance and recognition. By the fourth quarter of 2016, retail vacancy had decreased to 5.4 percent, down from 6.1 percent at the beginning of 2016, while market rents for major submarkets held steady around $12.37 per square foot. Downtown Birmingham, which hasn’t been viewed as a major retail area for decades, is the site of resurgent interest and accompanying capital. Some of the revitalization is occurring due to a renewed interest in public greenspaces, such as the recently developed …

May 30, 2017

Alabama Market Reports Multifamily Southeast Southeast Market Reports

Multifamily Investors, Developers Expose Montgomery as a Diamond in the Rough

by John Nelson December 19, 2016

Commonly referred to as the River Region, Montgomery is the second largest city in Alabama and the state capital. The Montgomery metropolitan area consists of Autauga, Elmore, Lowndes and Montgomery counties. With a population approaching 374,000, the River Region’s diverse economy, skilled workforce, business-friendly climate and Southern charm continue to attract new residents and commercial development. Key industries in the Montgomery metro area include automotive, manufacturing, fabricated metals, plastics, warehousing/distribution and state/regional government. As of June 30, total unit count in the Montgomery market is 6,588 with an average year built of 1997. According to the Axiometrics second-quarter 2016 report for Montgomery, annual effective rent growth has averaged 1.2 percent since the fourth quarter of 1996 with annual effective rent growth forecast to be 0.1 percent for 2016, 1.7 percent in 2017 and an average of 2.6 percent from 2018 to 2020. The Axiometrics report also states the market’s occupancy rate has averaged 92.2 percent since the fourth quarter of 1995. Currently, occupancy in the Montgomery market is 89.6 percent as of second-quarter 2016, which is a slight decrease from 91.1 percent in the first quarter of 2016 and 90.7 percent in second-quarter 2015. Axiometrics projects the market’s occupancy rate …

December 19, 2016

Alabama Market Reports Retail Southeast Southeast Market Reports

New Publix, Apartment Projects in Downtown Birmingham Spur on Retail Growth

by John Nelson July 4, 2016

The real estate market in downtown Birmingham has followed the “chicken and egg” trend. Over the last few years, over a dozen multifamily projects have been announced, but the major hurdle is proving the demand as people moving downtown have wanted a downtown grocer. While some multifamily developers decided to proceed with construction, others waited on the sidelines hoping a grocer would announce a new downtown location. On the other hand, major grocers put off locating in downtown Birmingham due to the lack of people living in the general area. Problem solved when construction started last year on a new 30,000-square-foot Publix with a full-service pharmacy in downtown Birmingham. Developers Scott Bryant and Dick Schmalz announced that the Publix will anchor a new multi-story, mixed-used development. Publix considered a store in downtown Birmingham in 2007 and again in 2009 before finally deciding to bring a store downtown now. The development of the Parkside District with Railroad Park and Regions Field, along with existing and planned apartment projects in the area, contributed to the timing. With the addition of Publix, several other multifamily projects are well underway or completed, such as the 228-unit LIV Parkside, 332 total units next to Regions …

July 4, 2016

Alabama Market Reports Office Southeast Southeast Market Reports

Sizable Transactions Set the Tone for Birmingham’s Office Market

by John Nelson June 27, 2016

Pick up any Birmingham newspaper and the headlines will likely reveal plans for a historic building renovation, a new mixed-use development or a prominent Birmingham company expanding into the Central Business District (CBD). Birmingham has enjoyed a surge of development over the last few years, with nationally recognized projects such as Railroad Park and Regions Field, the renovations of prominent downtown buildings and the emergence of new districts throughout the city. With all the development going on, it’s no wonder that the Birmingham office market is thriving with investors taking an interest in many of the city’s best Class A properties. The years 2014 and 2015 marked a record number of Class A properties trading to prominent national investors, and the trend seems to be continuing into 2016. Over the past year, Hertz Investment Group expanded its Birmingham footprint to include Inverness Center (four buildings), the Wells Fargo Tower and the BB&T Bank Building, a total of more than 1 million square feet. The Matrix Group purchased the four-building portfolio Meadow Brook North, totaling more than 500,000 square feet. 2016 is off to a promising start with the sale of one of the Southern submarket’s most prominent buildings, the 211,335-square-foot …

June 27, 2016

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