Multifamily Projects, Experiences Redefining Birmingham’s Growing Retail Market
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 empty-nesters whose millennial children have left their suburban childhood households are wanting to experience the energy of downtown Birmingham. This suburban flight reversal to urban living is consistent with national trends, and the economic impact is reverberating throughout the MSA.
History Repeats Itself
Historic tax credits provided the economic stimulus to transform iconic Birmingham landmarks to their former glory, providing a supply for the growing residential and visitor demand. The Pizitz Department Store, built in 1923, reopened in 2017 with 143 luxury apartments above retail space. The Pizitz features the state’s first food hall and Warby Parker store, shared workspaces and is soon-to-be the future home to the Sidewalk Film Festival entertainment venue, all located in a revitalized theater district.
Historic tax credits also led to the transformation of the Empire Building, constructed in 1909, into the Elyton Hotel. The hotel is part of Marriott’s Autograph Collection, with retail including a restaurant and a very popular rooftop bar. Perhaps more importantly, the Elyton provides another 117 rooms to the city’s retail demand base.
Growth Begets Growth
Downtown Birmingham, long considered a food desert, added a 36,000-square-foot Publix supermarket with a pharmacy. Starbucks Coffee and Chipotle Mexican Grill opened adjacent to the grocer. Why? The continued downtown residential growth created the demand needed to support thriving retail.
Zagat named Birmingham one of America’s “most exciting food cities” as 17 new locally driven restaurants (non-chain) opened in 2017, including names such as Roots & Revelry, EastWest Kitchen & Bar, Avondale Common House & Distillery, Bartaco, Miami Fusion Café, Abhi and Big Spoon Creamery. From craft beers to cultural-fusion concepts, the demand for chef- and locally driven restaurants are at an all-time high.
Topgolf, World Games
Topgolf Birmingham, the first for the state of Alabama, opened late last year with a three-story, 65,000-square-foot entertainment venue offering golf games using micro-chipped balls, as well as restaurants, bars, a retail shop and other entertainment activities. The facility is on pace to attract 450,000 visitors annually, including both golfers and non-golfers alike. In addition to the Uptown Entertainment District, Topgolf is an economic catalyst to future development on the north side of Birmingham.
Its opening was also followed closely by the announcement of a future refurbished convention complex and adjacent 45,000-seat stadium slated to open in time for the World Games coming to Birmingham in 2021. (The World Games is a global competition platform for sports not at the Olympic Games. The 2021 program isn’t decided as of this writing but potential sports include baseball/softball, bowling, bodybuilding, kickboxing, lacrosse, muaythai, rugby, squash, sumo and tug-of-war.)
Continued Growth Downtown
While residential development growth will continue, it will eventually begin to slow as developers evaluate lease-up and sustainability of rents. However, additional retail supply should meet the new residential demand. Businesses are expected to continue to relocate to downtown and spur further entertainment, hospitality, retail and dining opportunities. When cities have a strong urban core, the entire MSA benefits, providing a better quality of life for all.
— By Doug Schneider, Executive Vice President of Operations, Bayer Properties. This article originally appeared in the April 2018 issue of Southeast Real Estate Business.