From the HSV Times
In Huntsville and Madison, 519 apartment units are now being built, according to a new report on the local market. And, about 1,000 more units that are part of six different projects are "scheduled for the near term," and could possibly get started in the next 12 months, said David Wilson, a sales agent with Birmingham-based Rock Apartment Advisors and president of The David Wilson Co. in Huntsville. Some of those projects are speculative, though, and may not be built, he said.
Nearly 2,000 units are part of future projects whose timing depends on market conditions.
"We're about to have a big wave (of apartment development) in the Huntsville market," Wilson said today during the fifth annual Huntsville Commercial Market Symposium.
Only 644 apartment units were added to the market in 2010 and only one new property with 86 units was added last year, according to the report by Wilson, who tracks dozens of local apartment complexes.
"The largest new construction coming out of the ground," he said, is the 226-unit Providence Place Apartments in the Village of Providence.
They destroyed one of the nice features of Providence, a nice greenspace with mature trees to put up these apartments. Poor design, poor planning, the new Huntsville look, actually it hasn't changed.
You have to wonder if developers and city leaders see good developments in other cities if they think..wow we could have done that.
Other developments under construction are Belk Hudson Lofts in downtown Huntsville, the second phase of Eagles Landing on Royal Drive in Madison, The Commons on Vermont Road in southeast Huntsville and the first phase of Limestone Creek north of Interstate 565 and east of Mooresville Road.
There's a "tremendous" number of apartment units in the pipeline right now, "but they're not all going to get done, at least in the near term."
The overall apartment occupancy rate last June was 92 percent, the result of people needing temporary housing after last April's storms, he said.
Wilson's survey in February showed a 90 percent occupancy rate for newer, more upscale Class A apartments. Then, three weeks ago, the Class A occupancy rate had climbed to 94 percent, he said.
Updates in other commercial markets were also presented at the symposium at The Ledges - hosted by the Alabama CCIM (Certified Commercial Investment Member) Chapter.
Don Beck, a partner with The Shopping Center Group, told the group that the North Alabama retail market is experiencing "a pretty good explosion."
In the Huntsville area, there's been growth along U.S. 72, in Bridge Street Town Centre and around Valley Bend at Jones Farm in south Huntsville. A number of retailers are taking over previously vacant spaces across town: a Michael's craft store will open in the former Books-a-Million space on Airport Road, Goody's returned late last year to South Huntsville Square and Aldi and Advance Auto Parts opened in empty spaces in Huntsville West.
"Tenants are looking," Beck said.
There's also been some "shuffling around" in the retail market, he said, with Bed Bath & Beyond relocating from Westside Center to Bridge Street and the Toys "R" Us store on Memorial Parkway and the Babies "R" Us store at Westside Center moving to a combined "R" Superstore at Bridge Street.
In the local office market, "things are not as rosy as they have been," said Kyle Collins, senior vice president of Colonial Properties Trust. Though the overall vacancy rate at Cummings Research Park was 4.75 percent at the end of 2011, the rate for multi-tenant space was almost 10 percent, he said. After a review at the end of the first quarter, Collins believes the vacancy rate for the park's multi-tenant space is more like 14 percent.
The vacancy rate for the downtown office market was 21.5 percent at the end of 2011, an improvement from 24 percent the previous year. Some developments, including Gateway Place at the former Councill Courts public housing site, should have an energizing effect, Collins said.
Vacancy rates for the Huntsville-area industrial market are rising, with the rate at 12.3 percent at the end of last year.
Two vacant buildings in Jetplex Industrial Park, including the 850,000-square-feet facility that Continental had occupied, have had an impact on that rate, said Jeff Wilke, a vice president at Graham & Co.
The historical average vacancy rate is 7 percent, he said.
"It only takes one or two big deals to make the numbers look a whole lot better," Wilke said.