Cox

There is an abundant supply of new retail space coming on line in Birmingham, Alabama, according to Donna Cox, director of marketing with Coldwell Banker Commercial-Eyster Properties. “This is making everyone wonder what absorption levels will be achieved,” she adds. Much of the new small shop space is leasing above $20 per square foot, as compared to just 2 years ago, when only a handful of centers commanded such rates. With the introduction of Publix, Birmingham continues to experience a proliferation of grocery-anchored centers. In addition, several mixed-use developments are on the drawing boards for delivery between now and 2007.

Recent, major new developments include:

• Patton Creek, a 615,000-square-foot center in Hoover. This development took off after the completion of the new fly-over road coming from Interstate 459 around the Galleria, creating three new intersections and connecting with Highway 150.

• Hayes Marketplace, a 750,000-square-foot center in Pelham. Located just off Interstate 65, this new center will contribute to the already booming Shelby County retail development.

• The Village at Lee Branch, a 400,000-square-foot center located along U.S. Highway 280 in the Greystone area. With Phase II already underway, the success of this center proves that the U.S. 280 corridor will continue to be one of the hottest retail markets in the region. Phase II of this center is expected to include Rave Motion Pictures and a string of two-story shops and restaurants.

• Inverness Heights Market, a 130,000-square-foot center located at the intersection of U.S. Highway 280 and Valleydale Road. This center fills the last corner of the intersection of U.S. Highway 280 and Valleydale Road. Anchor tenants include T.J. Maxx and PetsMart. The steep topography of the site created a challenge for developers. It takes a strong market like Highway 280 to justify the extensive change this site has undergone.

• Vestavia City Center, 200,000 square feet, located along U.S. 31 in Vestavia Hills. In addition to the centers mentioned, there has been talk about a new retail development along the Cahaba River in Vestavia Hills. The proposed development was recently approved by the City of Vestavia Hills and is planned to contain 108 acres of retail and office product. With much controversy surrounding this project, it will be interesting to watch.

“The majority of new retail developments in Birmingham follow the ‘path of growth’ that is generally south and east of I-459,” says Cox. “However, there are some notable infill developments planned for U.S. Highway 280 north of I-459.”

During 2003, Birmingham welcomed several new retailers, including Kohl’s, Galyan’s, Publix, Costco, Rave Motion Pictures, Panera Bread and Don Shula’s Steakhouse. Several more are scheduled to open in Birmingham, including Ted’s Montana Grill, Belk, Salsarita’s, McCormick and The Cheesecake Factory.

The overall metro Birmingham retail vacancy rate for third quarter 2003 was approximately 11 percent. The lowest vacancy rate within the four primary submarkets of Birmingham was in the South submarket, which includes those areas south and east of I-459. The South submarket experienced a 4.3 percent vacancy for the third quarter of 2003, and 4.4 percent over the past year.

For the near future, definitely keep an eye on the South submarket, suggests Cox. “More specifically, along U.S. Highway 280 south of Valleydale Road and along I-65 in the Alabaster/ Calera area,” she adds. “New residential growth in both of these areas of Shelby County has been significant and the success of the current retail centers would justify this pattern continuing for several years.”

©2004 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.