The Birmingham office market has been seeing some softening in recent months, according to Dean Nix, vice president at Harbert Realty Services, Inc. According to Nix, approximately 200,000 square feet of Class A spec space will be coming online in the CBD market in 2002.

Significant developments in the area include One Federal Place, a 250,000-square-foot Class A development in the CBD. 150,000 square feet has been pre-leased to the Bradley, Arant law firm. Concord Center is a 150,000-square-foot Class A project in the CBD that will be opening in early 2002. The Lange, Simpson law firm has pre-leased 50,000 square feet of this building. The Protective Life Corporation building in midtown is a 310,000-square-foot Class A construction that will be available in August 2002. There are 98,000 square feet available, and the balance is leased to the owner (Protective Life).

The majority of development is taking place in the CBD, where two major law firms are anchoring new buildings, according to Nix. Class A rental rates range from $17.50 to $23.50/RSF. Vacancy rates are at less than 10 percent.

Major leases include 150,000 square feet at One Federal Place (CBD) by the Bradley, Arant law firm, 50,000 square feet at Concord Center (CBD) by the Lange, Simpson law firm, 38,000 square feet at Colonial Plaza (CBD) by Hilb, Rogal and Hamilton of Alabama, and 19,000 square feet at Two North Twentieth (CBD) by UKI Communications, Inc. Nix also notes that last year GE Capital purchased over $26.5 million in office product in the area. "They bought three buildings, and prior to that, they only owned multifamily product," he says.

Areas to keep an eye on in the Birmingham area are the CBD and midtown. "These are good markets that show steady growth and relatively planned expansions," says Nix. "We have very vibrant healthcare, telecommunications, banking and legal centers."

Dean Nix is vice president of Harbert Realty Servcies.


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