Birmingham’s retail real estate market sees overall improvement

Above: The 30,000-square-foot Dirt Cheap store in Homewood Commons contributed to improvement in Birmingham’s retail market. (Michael Tomberlin/Alabama NewsCenter)
Birmingham’s overall retail real estate vacancy rate fell slightly during the second quarter.

A look at Birmingham’s Lakeview district, where many restaurants are planned or have opened in the past year.
According to Cushman & Wakefield EGS Commercial Real Estate, the Magic City’s retail absorption through the first and second quarters of 2015 came in at a positive 81,663 square feet, up from a negative absorption of 94,729 to close out 2014. The vacancy rate for the metro dropped from 10.6 percent during the first quarter to 10.3 percent mid-year.
“While there has been modest activity across Birmingham’s retail market during the first half of 2015, the overall outlook remains positive,” EGS said in its mid-year report. “The city is still considered an appealing market for national retailers, particularly along the U.S. Highway 31 and U.S. Highway 280 corridors. Additionally, the ongoing resurgence of Birmingham’s downtown has initiated several mixed-use developments with retail components that will continue to build momentum for Birmingham’s retail market as a whole.”
EGS said downtown’s 20 Midtown development, which will include a full-service Publix grocery store on the Southside near UAB, is the most significant downtown development to date.
Three submarkets, Central, Highway 280 and Hoover/Riverchase, saw the highest amount of positive absorption, with 47,755 square feet being absorbed in the Central submarket. This was mainly due to the 20,000-square-foot lease of Planet Fitness at Vestavia City Center and the 30,000-square-foot lease to Dirt Cheap at Homewood Commons, leaving the vacancy rate for the Central submarket at 7.8 percent, down from 9.2 percent in 2014.
Highway 280 saw 27,737 square feet of absorption during the second quarter, ending the mid-year point with a 6.3 percent vacancy rate, down from 7.1 percent a year ago.
Hoover/Riverchase saw 15,644 square feet of absorption during the quarter, better than the 39,952 square feet of negative absorption last year at this time.
The Highway 31 submarket also saw modest growth of 9,508 square feet.
Bryan Davis is the research/media coordinator for the Alabama Center for Real Estate housed within the Culverhouse College of Commerce at the University of Alabama. He can be reached at 205-348-5416 or at bkdavis@culverhouse.ua.edu. The Alabama Center for Real Estate‘s core purpose is to advance the real estate industry in Alabama by providing relevant resources in the areas of research, education and outreach.