2019-08-28_DTZ戴德梁行_Office_Q2_2017_Birmingham,AL_2页_271kb

Birmingham Office Market Q2 2017 Summary

Core Content

The document provides a comprehensive overview of the Birmingham, Alabama office market during the second quarter of 2017, including economic indicators, market performance, and key transactions. It is published by Cushman & Wakefield, a leading real estate services firm, and highlights both the state and local economic growth, as well as the dynamics of the office market in Birmingham.

Main Economic Indicators

Indicator	Q2 2016	Q2 2017	12-Month Forecast
Birmingham-Hoover Employment	520k	525k	▲
Birmingham-Hoover Unemployment	5.4%	5.0%	▼
U.S. Unemployment	4.9%	4.4%	■

The Alabama economy showed continued strength, with a significant drop in the unemployment rate and surpassing the two million job mark. Birmingham's unemployment rate also decreased, contributing to a positive market environment.

Market Overview

The Birmingham office market experienced modest growth in Q2 2017, with overall net absorption totaling 44,206 square feet (sf), up from 38,413 sf in Q1 2017. Key factors contributing to this growth include:

• A slight decrease in overall vacancy to 12.3%, from 14.4% in Q2 2016.
• The CBD Class A vacancy rate ended the quarter at 9.3%, while suburban Class A vacancy was 10.5%.
• Overall average asking rent for the Birmingham market was $18.75 psf, with Class A space at $20.90 psf.

Despite some submarkets reporting negative absorption, the overall market remained positive, driven by a major transaction involving IBERIABANK's acquisition of 2000 International Drive in Hoover, which reduced vacant space in the 280/Southern submarket.

Key Lease Transactions Q2 2017

Property	SF	Tenant	Transaction Type	Submarket
1000 Urban Center Drive	67,254	Medical Properties Trust	Lease / Expansion	280 / Southern
Riverhills Business Park, Building 300	14,300	BBG&S Engineering Services	Lease	280 / Southern
3500 Colonnade Parkway	11,972	Unknown	Lease	280 / Southern
22 Inverness Center	11,318	United Healthcare	Lease	280 / Southern
2201 Lakeshore Drive	8,173	Self-Insured Worker's Comp Fund	Lease	Midtown
2 Perimeter Park South	7,865	Sterne Agee	Lease / Expansion	280 / Southern
Meadow Brook 100	7,150	ENGS Commercial Finance	Sublease	280 / Southern

These transactions reflect both new leases and expansions, indicating growing confidence in the local market.

Key Sales Transactions Q2 2017

Property	SF	Seller/Buyer	Price / $PSF	Submarket
SouthBridge Office Park	225,162	Greenfield Partners / YMP RE Mgmt	$28,000,000 / $124	Midtown
2000 International Park	129,896	Iron Point Partners / IBERIABANK	$13,500,000 / $117	280 / Southern

These sales transactions highlight the ongoing activity in the Birmingham office market, with notable deals in the Midtown and 280/Southern submarkets.

Outlook

The outlook for Birmingham's office market remains positive, driven by the improving state economy. Year-to-date leasing activity for the first half of 2017 totaled 268,575 sf, a 28% increase compared to the same period in 2016. Local companies like Shipt and Medical Properties Trust are expanding their office footprints, signaling confidence in the market. It is expected that the second half of 2017 will see continued positive growth in the office market.

Summary of Market Trends

• Overall Net Absorption: Increased to 44,206 sf in Q2 2017.
• Vacancy Rate: Decreased slightly to 12.3%.
• Rental Rates: Held steady with an average asking rent of $18.75 psf for the Birmingham market and $20.90 psf for Class A space.
• Submarkets: Midtown and 280/Southern showed mixed performance, with some negative absorption in certain submarkets but overall positive trends.
• Key Drivers: Economic growth in Alabama, improved unemployment rates, and major lease and sale transactions.

Contact Information

For more information, contact:

• Audra Willingham
• Director of Marketing
• Tel: +1 205 314 5556
• Email: awillingham@egsinc.com

About Cushman & Wakefield

Cushman & Wakefield is a global real estate services firm with a presence in over 60 countries and 43,000 employees. It offers a wide range of services including agency leasing, asset services, capital markets, and investment & asset management, among others. The firm helps clients optimize the value of their real estate through a combination of global perspective and local expertise.