Industrial Market

Currently, overall occupancy for industrial and distribution space in the Birmingham market at end of 2006 was 83.1%, a drop from the 88.9% occupancy rate at the end of the previous year. However, the additional space added to this sector of the market means the area experienced positive absorption of almost half a million square feet.

The Birmingham Central submarket remains a highly desirable location for industrial and distribution property, due mainly to its access to all parts of the region and accessibility to the airport, interstates and rail. Occupancy increased slightly to 89.9%, and rental rates saw an increase as well, mainly in the service center properties.

The Eastern submarket saw occupancy rates edge up slightly, while rental rates increased noticeably over the previous 12 months. A bright future is in sight for this area with the newly announced Isuzu truck plant in Pinson Valley.

The I-459/Southern submarket continues to see new construction, due chiefly to interstate infrastructure, the availability of land, and suitability of topography. Five projects adding 1,532,396 square feet of industrial and distribution space increased the area’s total inventory in 2006. Occupancy dropped to 75% in 2006 due to the increase in inventory, combined with a significant tenant  relocating to a build-to-suit facility. Nonetheless, with the addition of over 1.5 million square feet, absorption in 2006 was 334,693 square feet.

Known as a steady distribution market for Birmingham, the Oxmoor Valley submarket has seen a marked rise in occupancy in 2006, increasing 6.3% to 88.7%. Positive absorption of 170,624 square feet helped tighten available space and brought rental rates up for bulk distribution and office warehouse properties.

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