This week’s featured property, the New South Federal Building, is the perfect opportunity for anyone looking for office space located in the heart of downtown.
Situated at the corner of Third Avenue North and Richard Arrington Jr. Boulevard, this 66,519 square foot building is in a prime location with convenient access to Red Mountain Expressway, I-59, I-65, as well as City Hall, Jefferson County Courthouse, Hugo Black Courthouse and U.S. Federal Courthouse. Continue reading “Featured Property: New South Federal Building”
Vacancy levels have improved slightly from where we were this time last year. The 3rd quarter vacancy rate in 2013 was 14.1%. Currently, the Birmingham vacancy rate is approximately 13.4%. To have improved at all this year says a lot about the Birmingham market, based on the fact that we lost several large law firms in 2014. Haskell Slaughter and Johnston Barton both shut their doors this year. Those two firms alone combined for over 100,000 SF in tenant reduction for the market. Even with those tenants being removed from our numbers, we still had a modest decrease in vacancy.
Last Friday, Southpace brokers attended the 21st Annual CCIM/NAIOP Central Alabama Commercial Market Symposium. Although the majority of downtown Birmingham lost power that morning, the speakers didn’t let the darkness deter them and the conference continued successfully. See below for a recap of what was discussed regarding each market.
For those in commercial real estate, specifically retail real estate, you’re familiar with Exclusive Use Rights – a tenant can (and generally should) require a landlord to prohibit leasing space to another tenant selling the same product, or allow any other specified activities that could interfere with the success of their business. Typically this Exclusive Use component of the lease is based on the property itself.
While this is nothing new to the retail segment, oddly enough, this idea of Exclusive Use is now also spreading into office real estate.
Why? Because the popularity of creative office spaces and mixed-use properties continues to increase.
Are we finally seeing light at the end of the tunnel? Birmingham’s office market appears to be reaching acceptable vacancy levels.
The 3rd quarter vacancy rate in 2011 was 17.5%. In 2012, the vacancy rate in the same period was 19.6%. Currently, the vacancy rate for Birmingham is approximately 14.1%. To have a positive swing of this magnitude is great for our market. In the 3rd quarter, we’ve had a positive absorption of approximately 112,000 SF. Year-to-date, we’ve had a positive absorption of approximately 122,000 SF. For a market that has approximately 18,500,000 SF of office space, that’s another sign of improvement.
I recently read an article in the Birmingham Business Journal that discussed ten things a tenant should ask before choosing office space. While all ten were fair questions that would prove informative and beneficial for the tenant, I believe the most critical question to ask is, “Why don’t we hire a competent tenant representation broker?”
As Birmingham’s office market goes, status quo is status quo. The vacancy rates have not changed significantly over the past few years. The 3rd quarter vacancy rate in 2011 was approximately 17.55%. As of the end of the 3rd quarter 2012, the vacancy rate was 19.6%.