Historically, Birmingham, Alabama, has never been what could be termed a boomtown as far as development in the industrial sector goes, but Birmingham has always seen slow steady growth that continues today, says Andrew L. Sink, SIOR, vice president of Eason, Graham & Sandner, Inc. in Birmingham.

Recently, the location of two major automotive manufacturing plants in the Birmingham area has resulted in an increased demand for bulk space, which has led to a primary focus on bulk distribution space in new industrial development, according to Sink.

Mercedes Benz located a plant approximately 30 miles west of Birmingham to produce its M Class Sport Utility Vehicle. In fact, Mercedes Benz leases the largest single block of space currently leased in a multi-tenant project in Birmingham: approximately 600,000 square feet of bulk distribution space at Perimeter Industrial Park. Additionally, Honda is in the process of building a plant approximately 40 miles east of Birmingham to produce the Odyssey Minivan. Many of the companies that are new to Birmingham spinoff from the automobile plants located on both sides of Birmingham.

Most of the new companies looking at Birmingham are non-manufacturing related. This is due in part to a non-attainment issue with the federal government as it relates to ground level ozone. This non-attainment does not allow new manufacturing operations with high emissions in the Birmingham area, explains Sink.

During the past 24 months there have been two major bulk distribution industrial developments in the Birmingham area. Shades Creek Business Park, located in the Oxmoor submarket, was developed by Eason, Graham & Sandner, Inc. and contains approximately 185,000 square feet of bulk distribution space. Phase II of the project, currently in the planning stages, will add another 130,000 square feet of bulk distribution space. Another development has recently been completed in the North Shelby County area near Calera. This project, Shelby Commerce Park, was developed by Graham & Company and contains approximately 206,000 square feet of bulk distribution space. Sink says he believes both projects were completed to satisfy existing demand for bulk distribution space in the Birmingham area. Further, he expects all the space should be absorbed in a relatively good time frame. There are also plans for up to 1 million square feet of bulk space at Shelby Commerce Park in the future, but there are no formal plans as to when the additional space may be delivered.

Birmingham suffers from a lack of good industrial sites due to its topography, and new development is generally directed to areas with flat sites. These areas include the Calera area in North Shelby County, and the Bessemer/McCalla areas just southwest of town in Jefferson County. Oxmoor Valley continues to be the market with the highest demand, which should help keep rates in this market strong. The demand for space in the Oxmoor Valley area, along with the lack of available sites for new development, should help make this market strong for the foreseeable future, predicts Sink. "We expect to see continued development for bulk distribution product in the North Shelby County area, due mainly to the availability of suitable sites for larger developments," explains Sink.

Rental rates in Birmingham vary widely, depending on the specific submarket and the specific product type, according to Sink. As a whole, bulk distribution space in the Birmingham market ranges from $2.25 to $4.75 per square foot, net. Office warehouse space ranges from $4 to $6 per square foot, net. Service center space ranges from $5 to $10 per square foot, net.

Recent major leases in the area include North American Van Line' lease of 60,000 square feet at Shades Creek Business Park, a 56,000-square-foot lease by Hillti at Shelby Commerce Park, BellSouth' lease of 60,000 square feet at Old Leeds Park and Mercedes Benz signed a 175,000-square-foot lease at Perimeter Industrial Park.

Andrew Sink, SIOR, is vice president of Eason, Graham & Sandner Inc. in Birmingham.


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