The majority of Huntsville's office development occurs sporadically in the Research Park Market as demand dictates, according to Joseph Schneider, associate broker with Eason, Graham & Sandner. Development in this submarket is usually dependent on a large pre-commitment by tenants prior to breaking ground, adds Schneider. The submarket does see a fairly large number of build-to-suit developments, however. Speculative office development is virtually non-existent in Huntsville.

Significant developments in the area include the Colonial Bank Building in the downtown market totaling 90,000 square feet that was completed last year. Colonial Bank occupies approximately 50,000 square feet with the balance being occupied by approximately four other sizable tenants. Research Park Office Center was also completed last year and totals approximately 237,000 square feet. This flex space is occupied by a number of large, national high-tech and aerospace firms as well as local high-tech companies.

Currently, developments under construction include 40,000 square feet of multi-tenant flex space of which 20,000 square feet is pre-leased, a 50,000-square-foot office and production facility for Sheerwater Corporation and a 60,000-square-foot corporate office for Military Technology, Inc.

Cummings Research Park is also home to several large tenants. However, The United States Army and other branches of the United States Government typically take large blocks of office space outside the confines of Redstone Arsenal.

Major leases that have closed recently include OAO Corporation's lease of approximately 17,000 square feet and The United States Army's lease of approximately 25,000 square feet at Madison Research Center. Wolverine Tube also leased approximately 16,500 square feet at the AmSouth Bank Building.

Most office developers are native to the Huntsville market, according to Schneider. Office developers in the Huntsville market include Samples Properties, InterSouth Properties, The Westminister Group and Colonial Properties Trust.

Rental rates range from $15.50 to $17.50 for true Class A office product in Huntsville. According to Eason, Graham & Sandner, Inc. Market Report for 2001, Class A occupancy was at 81percent and Class B was at 67 percent at year-end.

"The Research Park Market will continue to see steady and healthy growth," says Schneider. Currently, according to him, there is talk of a number of developments coming online within the next 12 to 18 months, ranging from 60,000 square feet of Class A office to 150,000 square feet of high-density office.

Huntsville continues to flourish with the addition of two new large power centers. "Many of these retailers are new to the Huntsville market," says Schneider. "The Highway 72 corridor should flourish with retail development over the next several years as the City and County of Madison continue to see considerable population growth." Schneider also notes that Huntsville has attracted both Target with a 1,300,000-square-foot distribution center that opened earlier this year, and Toyota Motors with a new V-8 engine manufacturing plant that should be in production by summer of 2003.

Joseph Schneider is an associate broker with Eason, Graham & Sandner Development.


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