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In 2016, the overall Birmingham Office Market posted -519,151 sf of absorption. While this number seems high, it represents less than 2% of the total market. The majority of this decline can primarily be attributed to three tenants vacating large spaces. Despite this setback, confidence in the market remains high with new developments in the pipeline, redevelopments beginning to come to fruition, and local companies continuing to grow.
The Central Business District was the strongest performing submarket in 2016, posting over 60,000 sf of positive absorption.
During 2016, there was more than $450 million in building sales over 25,000 sf. The largest sale transaction of the year was the recently leased, 669,438 sf,“Red Roof” buildings at the Colonnade. These two buildings sold to an out-of-state investor for $131 million. Additionally, Grandview II traded twice during the year, and the Financial Center was sold to a local firm. In all, there were eight office buildings over 100,000 sf that changed hands in 2016, continuing
a record trend of Class A office sales.
FUTURE
Continued momentum in the CBD and more office space coming online in the suburbs will drive the office market in coming years. Additionally, as the revised Historic Tax Credit passes the legislature, we can expect more redevelopment projects in the city’s center for years to come.
Yours Truly,
Steve Graham, MAI, CRE
Mike Graham, CPM, SIOR
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BHM Office Report – 1.97MB
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