MARKETBEAT
Birmingham, AL
Industrial Q4 2016
BIRMINGHAM INDUSTRIAL
Economy
Economic Indicators
Q4 15
Q4 16
Birmingham-Hoover Employment
517k
522k
Birmingham-Hoover
Unemployment
5.6%
5.3%
U.S. Unemployment
5.0%
4.8%
12-Month
Forecast
Market Indicators (Overall, All Property Types)
Vacancy
Q4 15
Q4 16
12.4%
8.8%
YTD Net Absorption (sf)
80k
1.4M
Under Construction (sf)
0
260k
Average Asking Rent*
$4.58
$5.01
12-Month
Forecast
Market Overview
*Rental rates reflect net asking $psf/year
Overall Net Absorption/Overall Asking Rent
4-QTR TRAILING AVERAGE
$5.00
275,000
$4.50
175,000
$4.00
75,000
$3.50
-25,000
2011
2012
2013
2014
Net Absorption, SF
2015
Leading indicators suggest continued economic improvement in
Alabama. At the end of 2016, Alabama’s unemployment rate fell
to 6.2%, down slightly from 6.3% twelve months prior. According
to Alabama’s Department of Labor, manufacturing employment is
driving job growth, ending 2016 at its highest level since 2008.
The fourth quarter of 2016 brought with it news of significant
investments in Alabama. German automotive supplier
MöllerTech announced plans to build a new $46.3-million
manufacturing facility in Bibb County, which is expected to create
more than 200 jobs. Additionally, Austria-based Lenzing AG
announced plans for a $293-million expansion at its fiber plant in
Mobile County, creating 163 jobs over three years.
2016
Asking Rent, $ PSF
Overall net absorption for Birmingham’s multi-tenant industrial
market remained in positive territory during 2016, ending the
year with nearly 1.4 million square feet absorbed, compared with
80,235 square feet (SF) absorbed in 2015. Bulk distribution
product accounted for 98% of the year-end absorption total.
Overall vacancy for the Birmingham market fell to 8.8% at the
end of 2016, down from 12.4%, as several large tenants
including Neoiva Logistics Services, Mercedes Benz U.S.
International (MBUSI) and Symbiotic occupied space during
2016. Additionally, the steady flow of small- to mid-sized
transactions ranging from 10,000 SF to 80,000 SF pushed the
year-to-date leasing total to over 1.1 MSF for the third year in a
row. Overall average weighted asking rents are trending higher,
with the average asking rental rate increasing from $4.58 per
square foot (PSF) in 2015 to $5.01 PSF in 2016. While there was
no new speculative construction during 2016, two smaller buildto-suit projects totaling 180,000 SF were completed during fourth
quarter and another 260,000-SF build-to-suit project is under
construction with expected delivery in early 2017.
Overall Vacancy
30%
Outlook
25%
Overall, Birmingham’s multi-tenant industrial market experienced
healthy growth in 2016. Economic activity surrounding Alabama’s
automotive, aerospace, housing and healthcare industries
continued to increase on a statewide level and vacancy is
expected to tighten across Birmingham’s industrial market. As
the availability of quality space continues to diminish, the market
may experience an increase in build-to-suit activity as there is no
new speculative construction planned in the near future.
20%
15%
Historical Average = 16.3%
10%
5%
0%
2011
2012
2013
2014
2015
2016
cushmanwakefield.com
MARKETBEAT
Birmingham, AL
Industrial Q4 2016
TOTAL
BLDGS
INVENTORY
(SF)
YTD
USER SALES
ACTIVITY
(SF)
OVERALL
VACANCY
RATE
YTD
OVERALL NET
ABSORPTION
(SF)
Central
62
3,951,147
31,000
15.2%
-75,600
0
Eastern
20
2,580,300
1,305,910
1.6%
1,088,598
Oxmoor Valley
47
2,666,564
202,450
6.9%
104,933
Southern
77
3,948,003
14,000
6.8%
Southwestern
24
2,094,245
10,000
11.4%
230
15,240,259
1,563,360
8.8%
SUBMARKET
BIRMINGHAM TOTALS
OVERALL
WEIGHTED AVG.
NET RENT
OVERALL
WEIGHTED AVG.
NET RENT
178,910
$9.27
$3.03
0
18,125
$6.13
$5.11
0
207,565
$7.72
$8.13
264,448
0
657,171
$9.04
$6.70
-10,600
260,000
54,300
$7.00
$4.72
1,371,779
260,000
1,116,071
$8.16
$4.57
*Rental rates reflect asking $psf/mo.
UNDER
YTD
CNSTR
LEASING
(SF) ACTIVITY (SF)
OS = Office Service/Flex
(OS)
(W/D)
W/D = Warehouse/Distribution
Key Lease Transactions 2016
PROPERTY
SF
TENANT
TRANSACTION TYPE
SUBMARKET
Southern
Calera Distribution Center
270,600
Neovia Logistics Services
Lease
Shelby Commerce Park
225,496
MBUSI, Inc.
Lease
Southern
400 Industrial Drive
200,000
Symbiotic
Sublease
Oxmoor Valley
125,000
Motion Industries
Lease
Eastern
89,600
Kamtek, Inc.
Lease
Eastern
Southwestern
2901 Alton Way
3950 Valley East Industrial Drive
Perimeter Industrial Park
84,000
Pratt Industries
Lease
Lyon Lane Distribution Center
52,360
voestalpine
Lease
Oxmoor Valley
Perimeter Industrial Park
50,400
Gestamp
Lease
Southwestern
Eastern
2547 Commerce Circle
30,660
Birmingham Packing, LLC*
Lease
3201 3rd Avenue S
29,316
Alabama Department of Labor
Lease
Central
Central
Avondale Commerce Park
25,000
R. R. Donnelly
Lease
Cahaba Valley Business Park
25,000
Swisslog
Lease
Southern
SELLER/BUYER
PRICE / $PSF
SUBMARKET
*Renewal – not included in Leasing Activity Statistics
Key Sales Transactions 2016
PROPERTY
4680 & 4700 Pinson Valley Parkway
Airport Highway Park
SF
1,032,000
263,369
451 Industrial Lane
219,312
Shades Creek Business Park
195,848
123 W Oxmoor Road
182,418
2901 Alton Way
127,250
Cushman & Wakefield / EGS
505 20th Street North, Suite 700
Birmingham, AL 35203
cushmanwakefield.com
egsinc.com
For more information, contact:
Audra Willingham
Director of Marketing
Tel: +1 205 314 5556
[email protected]
STAG II Birmingham, LLC /
AL Land Holdings, LLC
$5,750,000 / $6
Eastern
AHP LLC / Benerofe Properties
$11,400,000 / $43
Central
$6,000,000 / $27
Oxmoor Valley
$10,200,000 / $52
Oxmoor Valley
$4,000,000 / $22
Oxmoor Valley
WP Carey REIT /
Beacon Associates Inc.
Oxmoor Partners LLC /
HC Birmingham Industrial LLC
CHAMCO Investments LLC /
City of Homewood AL
McGahey Properties LTD /
Park Underwood LLC
$6,275,000 / $49
Eastern
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