Monday, 23 July 2012

EGS Commercial Real Estate conducts 156 deals around Birmingham

BIRMINGHAM, Alabama -- Birmingham's EGS Commercial Real Estate conducted 156 transactions through the mid-point of this year, for a total of 7.8 million square feet and $55 million value.

The local highlights in EGS' slate of deals include a 60,000-square-foot lease for Roofing Supply Group on 31st Street North, a lease of 17,819 square feet at Ridge Park Place for law firm Dominick Feld Hyde P.C. and the purchase of 59 acres in Shelby West Corporate Park for a new Hibbett Sports distribution center.

EGS also represented TJ Maxx in a new lease at the Century Shoppes of Gardendale, as well as The North Face, which is making its debut in the Birmingham market with a new store at The Summit.

EGS President Bill Pradat said the Birmingham area office market has had minimal absorption so far this year, at about 6,000 square feet.

Activity has increased, but most of the deals have been lateral moves, Pradat added. One head-scratcher is the Midtown submarket, where there is a 93 percent occupancy rate in Class A office space, and no new construction.

"I think it just cries out for something to happen in the future," he said of the area generally defined as the over-the-mountain communities and Southside.

However, there are very few developable sites in the area; another barrier is likely the tight lending process.

"The deal cycle from start to finish seems to be a lot longer," Pradat said. "The business community in general is just very cautious right now, and certainly there's a lot of uncertainty, with the jobs numbers and housing. It's also close enough to November that people are casting an eye toward the elections and how that will affect business."

As for the retail market, the midpoint of 2012 looks a lot like the end of 2011, said Emris Graham, EGS senior vice president.

Current occupancy levels are at 87 percent, versus 87.6 percent then.

Among submarkets, U.S. 31 South has the highest overall occupancy, at 92.5 percent, while the low is in the Northern submarket.

"Overall the market is holding its own with no major activity to speak of," Graham said. "Barring any kind of significant economic downturn, we believe that the market will gradually improve through the remainder of 2012."

Metro Birmingham's industrial market is also holding its own, and the latest data point to a continuation of positive trends, said Mark Byers, EGS executive vice president.

During the second quarter, absorption in the industrial market was 112,464 square feet, and there are more deals in the works. Positive absorption means more space was occupied than was vacated.

"The statistics are encouraging because they continue a trend for what I think is a third quarter positive absorption," Byers said.


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