Thursday, April 17, 2025
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AlabamaMarket ReportsOfficeSoutheastSoutheast Market Reports

Birmingham’s Office Market: Steady, Resilient and Ready for What’s Next

by John Nelson

Birmingham’s office market is holding its own with overall market occupancy at 82.6 percent as of fourth-quarter 2024. We saw a slower second half of the year, but that is to be expected during a presidential election year when companies often hit pause on significant real estate decisions.  During the fourth quarter, Birmingham’s multi-tenant office market recorded negative absorption of 67,739 square feet, but that was a notable improvement from the negative 268,061 square feet recorded the previous quarter.  Leasing activity for the quarter came in at 180,849 square feet, bringing the year-to-date total to just over 562,000 square feet — about 22 percent below the previous year’s pace. While definitely a slowdown, this performance is nothing out of step with the broader national trends. Signs of positive momentum The good news? Since the start of 2025, activity has picked up across the board. Tenants are back in the market touring space and rethinking their long-term office needs. Some are expanding, some are rightsizing to space that better fits how they work today and others are updating their office protocols to bring employees back in more regularly — all of which is driving movement in the market.  In addition, several …

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AlabamaHealthcareLoansSoutheast

First Citizens Bank Provides $53.5M Loan to Refinance Medical Office Facility in Birmingham

by John Nelson

BIRMINGHAM, ALA. — First Citizens Bank’s healthcare finance division, First Citizens Healthcare Finance, has provided a $53.5 million loan to refinance Grandview Physicians Plaza II, a 140,000-square-foot medical office facility located in Birmingham. The borrower was an affiliate of Rethink Healthcare Real Estate. Constructed in 2022, Grandview Physicians Plaza II is situated within the Grandview Medical Center Campus that occupies Affinity Hospital and Grandview Plaza I. Grandview Plaza II completes the primary medical campus for Grandview Health, which has signed a long-term anchor tenant lease for physician offices and hospital services. First Citizens Healthcare Finance also provided takeout financing for Grandview Physicians Plaza I in 2024.

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AlabamaMarket ReportsRestaurantRetailSoutheastSoutheast Market Reports

Birmingham Retail Market: Stability Amid Changing Dynamics

by John Nelson

Birmingham’s retail market continues to demonstrate resilience despite national economic challenges. With a vacancy rate of 3.8 percent — slightly below the national average of 4.1 percent — and rental rates holding steady at $13.13 per square foot, the city remains an attractive destination for both investors and tenants.  However, rising interest rates have slowed development and softened transaction volumes, reshaping the investment landscape. Macroeconomic trends  The intersection of economic pressures and shifting consumer habits is redefining Birmingham’s retail landscape. Across the nation, big-box retailer bankruptcies have contributed to negative net absorption of 346,200 square feet over the past year, and Birmingham has felt similar effects. The closure of Conn’s HomePlus, among other retailers, has contributed to this contraction. Despite these challenges, suburban retail demand remains robust. Homewood, Hoover and Alabaster are experiencing continued growth, and Crestwood Festival Shopping Center has added new tenants like Fun City Adventure and Armor Gym occupying 100,000 square feet. These trends highlight the increasing popularity of experiential retail, as consumers gravitate toward destinations that offer more than just traditional shopping. Development slows New retail construction has slowed significantly, with only 130,000 square feet delivered in the past year — well below historical averages. However, …

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AlabamaDevelopmentHospitalitySoutheast

Choice Hotels Opens 98-Room Everhome Suites Hotel in Huntsville, Alabama

by John Nelson

HUNTSVILLE, ALA. — Choice Hotels Internationals Inc. has opened a new Everhome Suites Hotel in Huntsville. The project team includes architect Woolpert and general contractor Integrated Construction. An entity doing business as EHS Huntsville LLC was the developer. Located at 5581 Holmes Ave., Everhome Suites Huntsville offers access to the University of Alabama in Huntsville, the U.S. Space & Rocket Center and the city’s medical district. The hotel features 98 rooms, including amenities such as fully equipped kitchens, spa-style bathrooms, weekly housekeeping services, a multipurpose lobby, an outdoor communal space with barbeque grills, firepits and green spaces, 24/7 fitness center and 24/7 laundry facilities. Additionally, the hotel offers a 24/7 self-serve Homebase Market with food, beverages and groceries. Everhome Suites Huntsville is one of three Everhome Suites opened by Choice Hotels recently, with other locations in Chandler, Ariz., and Temecula, Calif. Everhome Suites is on track to have 25 hotels open by the end of the year, with 20 currently under construction and more than 65 hotels in the development pipeline.

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AlabamaIndustrialMarket ReportsSoutheastSoutheast Market Reports

‘Clouds Are Clearing’ for Next Step of Birmingham’s Industrial Market

by John Nelson

The Birmingham industrial market is poised for an increase in absorption as the apex of higher interest rates seem to be settling down, not to mention the post-election certainty that now favors business expansion. Corporate America is waking up and the clouds are clearing.   For the past 24 months, the competitive set of investor-controlled warehouse space has been sitting on about 2 million square feet of inventory. About 550,000 square feet of that is still unleased speculative space in three different projects delivered at the back-end of the post-COVID development wave that did see about 700,000 square feet of absorption of new spec space before the music metaphorically stopped.  Then came the 2023/2024 wave of the “new spec space,” a byproduct of the mentioned interest rates and COVID over-correction. Several second-generation spaces are now being marketed as companies vacated or downsized for various reasons. For example, discount retailer Dollar General is vacating an entire 307,000-square-foot warehouse.  Broader, there have been two major announcements in Central Alabama for the closure of distribution centers, both as a result of retailers’ bankruptcies. JoAnn Fabric’s 700,000-square-foot distribution facility in Opelika at I-85 is now on the market as is the 1.2 million-square-foot former …

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AlabamaMarket ReportsMultifamilySoutheastSoutheast Market Reports

Limited Construction Starts Should Help Birmingham Absorb Available Apartments in 2025

by John Nelson

Southeast Real Estate Business recently caught up with John McCrary, director of investment sales in Berkadia’s Birmingham office, to discuss trends in the local apartment market. McCrary, who specializes in investment sales in Alabama, east Tennessee and southern Mississippi, says that Birmingham’s occupancy will likely take a hit as new deliveries hit the market in the first half of the year, but there’s optimism that renters will be able to absorb those availabilities in short order. “With approximately 800 units expected to be delivered at the beginning of 2025, vacancy rates are likely to rise throughout the year,” says McCrary. “However, the slowdown in construction starts should help absorb existing units and eventually reduce the elevated vacancy rate.” The following is an edited interview: Southeast Real Estate Business: What major local or macro-economic trends are affecting the multifamily market in Birmingham?  John McCrary: The interest rate environment is a key factor influencing multifamily dispositions, both in the Southeast and nationwide. Fluctuations in interest rates impact borrowing costs for developers and investors, thereby affecting the supply and demand for multifamily properties. Over the past year, Birmingham has seen strong multifamily demand, but it hasn’t kept pace with the influx of new …

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AlabamaDevelopmentLoansMultifamilySoutheast

Berkadia Arranges $35M Construction Loan for Multifamily Development in Montgomery, Alabama

by John Nelson

MONTGOMERY, ALA. — Berkadia has arranged a $35 million construction loan for The ONE at Montgomery, a new 264-unit multifamily development in Montgomery. Brad Williamson, Patrick Johnson, Mitch Sinberg, Scott Wadler and Matt Robbins of Berkadia’s Miami office arranged the financing on behalf of the Miami-based borrower, One Real Estate Investment (OREI). Synovus Bank provided the floating-rate loan at an approximately 65 percent loan-to-cost ratio. Located at 10510 Chantilly Parkway, the garden-style development will offer a mix of 96 one-bedroom units, 132 two-bedroom units and 36 three-bedroom units. Units will range in size from 827 square feet to 1,254 square feet. Amenities at the property will include a swimming pool with a cabana and sauna, fitness and yoga studio, multiple dog parks and a golf simulator. Construction on The ONE at Montgomery is currently underway and is slated to complete in mid-2026.

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AcquisitionsAlabamaLoansMultifamilySoutheast

Cushman & Wakefield, Greystone Negotiate Sale of 720-Unit Apartment Community in Hoover, Alabama

by John Nelson

HOOVER, ALA. — Cushman & Wakefield and Greystone has arranged the sale of Ridge Crossings, a 720-unit apartment community located in the Birmingham suburb of Hoover. Canadian-based Avenue Living was the buyer. The sales price was not disclosed, but Birmingham Business Journal reports the property traded for $111 million. Originally completed in 1991, Ridge Crossings offers one-, two- and three-bedrooms ranging in size from 861 to 1,520 square feet. According to Apartments.com, amenities include a swimming pool, tennis and racquetball courts, fitness center, concierge services, dog park and a clubhouse. Andrew Brown, Craig Hey, Ben Thomas and Tommy Coleman of Cushman & Wakefield represented the undisclosed seller in the transaction. Additionally, Dan Sacks of Greystone originated a Fannie Mae loan of an undisclosed amount for the acquisition.

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AlabamaDevelopmentMultifamilySoutheast

Rockefeller, T2 Capital Begin Leasing 332-Unit Multifamily Property in Downtown Huntsville

by John Nelson

HUNTSVILLE, ALA. — Rockefeller Group and T2 Capital Management have begun leasing Vista at Councill Square, a 332-unit apartment development in downtown Huntsville. Designed by Matheny Goldmon Architecture + Interiors and OKW Architects, the six-story property will feature a mix of studio, one-, two- and three-bedroom apartments, including a few two-level townhomes. Monthly rental rates at Vista at Councill Square will begin at $1,403. Amenities will include two dedicated coworking spaces on the first and sixth floors, a fitness center with a yoga and meditation room, hospitality unit available for residents’ guests to rent nightly, EV charging stations in the garage, a game room and lounge, bike storage, pet spa and a rooftop pool deck.

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AlabamaDevelopmentMultifamilySoutheast

Doster Construction Completes $90M Multifamily Development in Huntsville, Alabama

by John Nelson

HUNTSVILLE, ALA. — Doster Construction Co. has completed Attain at Bradford Creek, a $90 million, Class A multifamily development in Huntsville. Alexandria, Va.-based Bonaventure is the developer and property manager for the project. Located at 556 Martin Road, Attain at Bradford Creek comprises 350 one-, two- and three-bedroom apartments ranging from 839 square feet to 1,375 square feet in size. Monthly rental rates begin at $1,134, according to Apartments.com. Amenities include a resort-style pool, fitness center, clubhouse, Amazon package lockers, dog park and a pond.

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