market survey | huntsville...in jetplex industrial park. yulista provides aviation maintenance and...
TRANSCRIPT
2011
M A R K E T S U R V E Y | H U N T S V I L L E
Industrial Market Overview . . . . . . . . . 1
Jetplex Industrial. . . . . . . . . . . . . . . . . 2
North Huntsville Industrial . . . . . . . . . 3
Chase Industrial . . . . . . . . . . . . . . . . . . 4
Offi ce Market Overview . . . . . . . . . . . 5
Downtown Offi ce. . . . . . . . . . . . . . . . . 6
Jetplex | Madison Offi ce . . . . . . . . . . 7
Cummings Research Park Offi ce . . . 8
BRAC Update . . . . . . . . . . . . . . . . . . . . 10
Cummings Research Park Map . . . . . 12
Retail Market Overview . . . . . . . . . . . 14
Retail Map. . . . . . . . . . . . . . . . . . . . . . . 16
Recent Graham Activities . . . . . . . . . 18
For Sale or Lease. . . . . . . . . . . . . . . . . 20
Graham Huntsville Group. . . . . . . . . . 23
TA B L E O F C O N T E N T S
EACH YEAR IN THE GRAHAM REPORT WE HAVE THE OPPORTUNITY TO OFFER COMMENTS ON
trends and patterns and to express an opinion on what went right and what went wrong.
In considering appropriate remarks here, we went back and looked at our topics of the last
three years. In the January 2008 column, we crowed on the positive and robust nature
of our local economy. In January 2009, we had to eat crow as the realities of the crash
of September 2008 unfolded. Last year at this time, we were beginning to see signs of
recovery. Our prediction of “recovery in sight” was accurate, partly. This year’s theme is
aptly titled, “Same song, second verse” — although we see signs of the recovery all around
us, the commercial real estate market still fi nds itself picking its way through a minefi eld of
excess capacity, pricing pressures, and lack of job growth.
Credit markets remain tight, and loan to value ratios appear to be trending to levels that
predate our careers. Interest rates still remain attractively low, and deals take more equity,
which is probably a good thing. For those owners who resisted the pressure to sell or lease
at the depressed rates of the past two years, they now have a chance to ride this one out,
and to plan rather than react. Economic indicators point to modest increases in rents and
demand. The recovery is still in sight.
- Mike Graham, CPM, SIOR • Steve Graham, MAI , CRE® -
PRINCIPALS , GRAHAM & COMPANY
Information deemed reliable,
but not guaranteed.
Copyright 2011.
Reproduction, in whole or part,
of this report is prohibited.
Cover: Redstone Arsenal
©SellersPhoto.
Special thanks to Hiroko Sedensky
and the Chamber of Commerce
of Huntsville/Madison County for
providing the Cummings Research
Park map and the Major Retail
Stores map.
Same Song, Second Verse
HUNTSVILLE INDUSTRIAL MARKET OVERVIEW
1
2011 [ 21.1 MILLION SF TOTAL ]
SINGLE TENANT 15,929,978 SF
MULTI-TENANT 5,214,890 SF
Industrial Market Overview
INDUSTRIAL: Th e Huntsville industrial market vacancy rate increased to 11.59% in 2010. Th is rate is an increase over the 2009 year-end vacancy rate of 9% and substantially higher than the year-end vacancy rate of 4.51% in 2008.
Th e Huntsville vacancy rate still remains well below the national industrial average of 14%. Th e national vacancy rate appears to have peaked in the 2nd quarter of 2010 and actually dropped 10 basis points in the 3rd quarter of 2010. Th is was the fi rst decline in three years and forecasts are calling for a continued decrease in the rate to 13.1% in 2011 and 11.8% in 2012.
2010 marked the fi rst time in at least six years that the Huntsville market has experienced negative ab-sorption. Th e sharp increase in vacancy rate and the negative absorption are due in large part to several plants closing recently in the Huntsville area.
New construction in the industrial sector was extremely low as developers worked to backfi ll the 500,000 sf of speculative industrial space that was introduced into the market in 2009.
Th is lack of new product in the area’s industrial inventory should quickly translate to decreasing vacancy rates once demand increases.
Industrial Announcements of Note:
• Raytheon announced plans to build a missile pro-duction facility on Redstone Arsenal. Th e company plans to assemble and test the Standard Missile 3 and Standard Missile 6 at the 70,000 sf facility. Once complete, the missile facility will create 300 jobs. • Continental Automotive closed its 850,000 sf plant.• The Delphi Saginaw Steering System plant located in Athens, AL closed its plant in June 2009. • Plans are still on pace to start production in the summer of 2011 at Huntsville’s Toyota plant for its four-cylinder motor. Th e expansion will bring its annual engine production capacity to more than 500,000. Over 10,000 applications were received for the 250 available new jobs.
G R A H A M & C O M PA N Y | 2 0 1 1 M A R K E T S U R V E Y | H U N T SV I L L E
2010INDUSTRIAL MARKET TOTAL SF VACANT SF 2006 2007 2008 2009 2010
SINGLE TENANT 15,929,978 SF 1,354,794 SF 2.73% 3.21% 3.27% 5.61% 8.50%
MULTI-TENANT 5,214,890 SF 1,095,428 SF 10.66% 11.42% 8.31% 19.19% 21.01%
TOTAL INDUSTRIAL 21,144,868 SF 2,450,222 SF 4.82% 5.12% 4.51% 9.04% 11.59%
VACANCY RATE
CIT Y VACANCY RATE
HUNTSVILLE 11.6%
ATLANTA 11.6%
NASHVILLE 11.7%
MEMPHIS 14.6%
AUSTIN 20%
RALEIGH-DURHAM 20%
INDUSTRIAL VACANCY RATE
COMPARISON CHART
2010
2
Jetplex Industrial Market
G R A H A M & C O M PA N Y | 2 0 1 1 M A R K E T S U R V E Y | H U N T S V I L L E
[ 11.9 MILLION SF TOTAL ]
SINGLE TENANT 7,833,705 SF
MULTI-TENANT 4,145,800 SF
YULISTA MANAGEMENT SERVICESYulista uses its 42,000 sf facility in Jetplex
Industrial Park for its work on simulator systems.
The Jetplex industrial market is Huntsville’s largest
industrial base and is comprised of several smaller
markets that surround the Huntsville Interna-tional Airport and the Intermodal Center. Jetplex Industrial Park contains 1,470 acres and is home to 54 corporate residents. It off ers Foreign Trade Zone #83, U.S. Customs Port of Entry and interstate access via I-565. Jetplex South Industrial Park, located just south of the Jetplex Industrial Park, contains 1,400 acres and provides convenient access to airport amenities. Lowe Industrial Park is a 900-acre park originally designed to encompass the growth of Intergraph Corporation.
Recent Developments:
• Science Engineering Services (SES) was select-ed by Boeing to perform disassembly, inspection and repair on the AH-64D Apache helicopters. Th e program will create approximately 70 new positions in Huntsville.• Yulista Management Services opened a location in Jetplex industrial Park. Yulista provides aviation maintenance and modifi cation work for several Red-stone Arsenal based clients.
• Th e Continental Automotive plant closed. Th e 850,000 sf building once employed over 1,200 people and is now being marketed for sale.
Major Area Tenants Include:
Boeing, LG Electronics, Navistar, SES, Cinram, and Kohler.
3G R A H A M & C O M PA N Y | 2 0 1 1 M A R K E T S U R V E Y | H U N T SV I L L E
North Huntsville Industrial Market [ 1.9 MILLION SF TOTAL ]
TOYOTA MOTOR MANUFACTURINGThe Toyota Motor Manufacturing plant builds V6
and V8 engines for Tacoma and Tundra vehicles.
The North Huntsville industrial market is comprised
of just over 1.9 million sf of primarily single tenant
buildings. Many of the buildings have been con-structed over the past ten years and are located along the Highway 53 corridor with good access to North Alabama and Southern Tennessee. Th e cen-tralized location and ease of access make the market a very attractive location for light industrial users with growing needs in the Tennessee Valley. Th e tenant mix in the North Huntsville area consists of companies in the automobile industry, defense con-tractors and local service companies.
Recent Developments:
• Th e Toyota Motor Manufacturing plant will start producing its four-cylinder engine in the summer of 2011. Th e Toyota plant now builds V6 and V8 engines for Tacoma and Tundra pickup trucks. Th e increase in production should add an additional 250 jobs to the facility.• MJLM Engineering and Technical Services held a grand opening for its new refurbishing facility in north Huntsville. MJLM provides engineering and technical support to the Close Combat Weapon System.
Major Area Tenants Include:
Toyota, Ferguson, Waste Management, and MJLM.
4
Chase Industrial Market
[ 4.8 MILLION SF TOTAL ]
SINGLE TENANT 4,747,930 SF
MULTI-TENANT 102,000 SF
G R A H A M & C O M PA N Y | 2 0 1 1 M A R K E T S U R V E Y | H U N T S V I L L E
Chase Industrial Park is a 1,700-acre park located
in northeast Huntsville that was developed by the
Madison County Commission. It is home to more than 35 domestic and international companies. Chase Industrial Park, comprised almost exclusively of single tenant buildings, has only 50 acres remain-ing for new development. Products manufactured in the park include medical instruments, DVDs, cop-per and plastic products, street sweeping machines and pharmaceuticals.
Transactions of Note Include:
• Huntsville-based Qualitest Pharmaceuticals was purchased by drug developer Endo Pharmaceuti-cals for $1.2 billion. Endo does intend to retain the Huntsville facility.• Fluidtrol Process Technologies moved its opera-tions to a facility in Chase Industrial Park.
Major Area Tenants Include:
Cinram, Endo Pharmaceuticals, CF Flag, United Plating, Available Plastics, Hart & Cooley, Schwarze Industries, Kommerling, PPG, Mesker Door, and National Copper & Smelting.
NATIONAL COPPER & SMELTINGNational Copper & Smelting is a leading
manufacturer of precision copper tubing.
CF FLAG COMPANYCF Flag Company is a leading manufacturer of
fl ags in the United States. The company’s
largest customers include the U.S. Government
and Veterans Administration.
5G R A H A M & C O M PA N Y | 2 0 1 1 M A R K E T S U R V E Y | H U N T SV I L L E
Offi ce Market Overview
[ 16.7 MILLION SF TOTAL ]
SINGLE TENANT 8,468,939 SF
MULTI-TENANT 8,211,083 SF
HUNTSVILLE OFFICE MARKET OVERVIEW
OFFICE: Th e Huntsville offi ce market vacancy fell to 8.11% in 2010, which represents a decrease from the 9.33% rate in 2009. Th e Cummings Research Park (CRP) offi ce submarket remains extremely tight with a year-end vacancy of 3.49%.
Th e Huntsville vacancy rate is well below the national average of 16.7%. Th e national vacancy average actually dropped in the third quarter of 2010, which marked the fi rst decline in three years. Most analysts predict that the offi ce sector vacancy rates have peaked and that fundamentals will continue to improve in 2011.
New construction in the offi ce sector was light with just over 250,000 sf of offi ce product added to the market in 2010. Absorption for the offi ce sector was up substantially from 33,000 sf in 2009 to 430,000 sf in 2010 .
Th e 2.4 million sf of new construction on Redstone Arsenal supporting the Base Realignment and Closure (BRAC) continues. Two of the larger projects, the 840,000 sf Missile Defense Agency building and the 400,000 sf Army Material Command, are scheduled to be completed in 2011.
Offi ce Announcements of Note:
• The Redstone Gateway Enhanced Use Lease
(EUL) project at Gate 9 on Redstone Arsenal broke ground with site work in 2010 and construc-tion should start in mid-2011. Th is planned four million sf offi ce project also includes a retail and hotel component to help service the workforce on Redstone Arsenal. • NASA’s Marshall Space Flight Center announced that approximately 500 people working on the Constellation rocket program were laid off . Funding for Constellation was cut by nearly $1 billion. Most layoff s occurred in the engineering and support contracts.• Intergraph agreed to be acquired by Hexagon AB, a Swedish technology company, for $2.1 billion. Th e Intergraph name and division headquarters will remain in Huntsville.• O & S Holdings announced pre-leasing plans for its second offi ce building within Bridge Street Town Center. Construction on the new 6-story, 140,000 sf building is expected to begin late 2011.
2010OFFICE MARKET TOTAL SF VACANT SF 2006 2007 2008 2009 2010
SINGLE TENANT 8,468,939 SF 374,663 SF 3.93% 3.65% 4.47% 4.55% 4.42%
MULTI-TENANT 8,211,083 SF 977,253 SF 10.03% 11.19% 9.54% 14.35% 11.90%
TOTAL OFFICE 16,680,022 SF 1,351,916 SF 6.89% 7.36% 7.0% 9.33% 8.11%
VACANCY RATE
OFFICE VACANCY RATE
COMPARISON CHART
2010
CIT Y VACANCY RATE
HUNTSVILLE 8.11%
NASHVILLE 10.6%
RALEIGH-DURHAM 12.7%
AUSTIN 14.2%
COLORADO SPRINGS 17.5%
ATLANTA 19.2%
6
Downtown Offi ce Market
[3.0 MILLION SF TOTAL ]
SINGLE TENANT 391,265 SF
MULTI-TENANT 2,650,197 SF
NATIONAL BANK OF COMMERCENational Bank of Commerce opened a branch in
downtown Huntsville’s historic YMCA building.
G R A H A M & C O M PA N Y | 2 0 1 1 M A R K E T S U R V E Y | H U N T S V I L L E
The Huntsville downtown offi ce market consists
of approximately 3 million sf and is dominated
by the business services sector including law fi rms, banking, accounting and real estate companies. City, county and government employees also make the downtown Central Business District (CBD) their home.
Th e vacancy in the downtown market increased substantially in 2010 due in large part to several high-tech companies moving out of the area. Several organizations, including Big Spring Partners and the City of Huntsville, are making a concerted eff ort to revitalize downtown.
Recent Developments:
• Renovations to the Von Braun Center and the Courthouse Square continue to take shape. • Bryant Bank and National Bank of Commerce established locations in the downtown Huntsville market. • Computer Sciences Corporation (CSC) moved its offi ce to Cummings Research Park (CRP). • SirsiDynix closed its Huntsville offi ce. • Construction began on a portion of the former Council Court housing project. Th e three story Gateway Place will serve as a senior apartment complex. Th e remaining 16.3 acres of available land is being off ered for sale.
Major Area Tenants Include:
BB&T, Lanier Ford, Regions Bank, Bradley Arant Boult Cummings, RBC Centura, ServisFirst Bank, Progress Bank and the City of Huntsville.
7G R A H A M & C O M PA N Y | 2 0 1 1 M A R K E T S U R V E Y | H U N T SV I L L E
Jetplex | Madison Offi ce Market
[ 1.6 MILLION SF TOTAL ]
SINGLE TENANT 690,000 SF
MULTI-TENANT 950,617 SF
The Jetplex/Madison offi ce market is the area’s smallest
market and is comprised of two main sectors: Jetplex and
Madison. Intergraph and Boeing serve as the Jetplex market’s largest offi ce tenants. Other offi ce uses in Jetplex are industrial or logistics oriented.
Th e City of Madison offi ce market is experiencing rapid growth with most of the increase occurring in the healthcare and banking markets. Th ese industries should continue to fl ourish as Madison’s population base continues to grow.
New Developments:
• Intergraph agreed to be acquired by Hexagon AB, a Swedish technology company, for $2.1 billion. Th e company will remain a separate division within Hexagon and will retain the Intergraph name. Th e division headquarters will remain in Huntsville. • Avnet Electronics relocated its offi ce to the Madison Research Park West development. Newly constructed, Madison Research Park West off ers the fi rst multi-tenant, LEED certi-fi ed buildings in the Huntsville area. • Construction began on the new Madison Hospital. Th e $71 million, 60-bed hospital should be open in February of 2012.
Major Area Tenants Include:
Intergraph, Boeing, Avnet Electronics, Bechtel, and Northrop Grumman.
AVNET ELECTRONICSAvnet relocated its offi ce to Madison Research
Park West. The company distributes electronic
components, technology solutions, computer
products and embedded technology.
The Cummings Research Park (CRP) offi ce market
is the largest in Huntsville with over 11.9 million sf,
representing over 71% of the total Huntsville offi ce market. Th e occupancy levels in CRP remained high in 2010 with a 3.49% vacancy rate.
Many companies in CRP act in a support role to meet the various demands for the military installa-tions located on Redstone Arsenal. Th e tenant mix ranges from Fortune 500 companies to local and international high-tech enterprises to space and defense agencies.
Cummings Research Park is the second largest research and technology park in the United States and fourth largest in the world. Th e park encompasses 3,843 acres and 430 acres remain for future development.
8 G R A H A M & C O M PA N Y | 2 0 1 1 M A R K E T S U R V E Y | H U N T S V I L L E
Cummings Research Park Offi ce Market
[ 11.9 MILLION SF TOTAL ]
SINGLE TENANT 7,3387,674 SF
MULTI-TENANT 4,610,269 SF
URS CORPORATIONURS Corporation expanded its Huntsville
presence with the opening of its new 17,000 sf
offi ce in Cummings Research Park.
WYLEWyle purchased CAS from ITT; the acquisition
will become a strategic unit within Wyle.
9G R A H A M & C O M PA N Y | 2 0 1 1 M A R K E T S U R V E Y | H U N T SV I L L E
Cummings Research Park Offi ce Market
DYNETICSDynetics broke ground on its 226,500 sf
building, the fourth facility on Dynetic’s
campus. It is scheduled for completion by
end of year 2011.
Recent Developments in the CRP Market:
• Dynetics held a ground-breaking ceremony for its $50 million, 226,500 sf facility. Th e building is the fourth on the Dynetics campus and will be used primarily as a design, development and prototyping facility. Th e building will house 300 to 350 engineers and technicians when complete. • The Defense Acquisition University opened its new 60,000 sf LEED certifi ed training center. Th e DAU trains government employees ranging from new hires to high-level project managers in acquisi-tion, technology and logistics.• Wyle purchased CAS, a Huntsville-based systems engineering and technical assistance service busi-ness, from ITT for $235 million. Th e acquisition will become a strategic unit within Wyle.• Analytical Services Inc. opened a 27,000 facility to accommodate future growth. Th is is the second building on ASI’s campus in CRP.• SirsiDynix closed its Huntsville offi ce. Th e com-pany specializes in library automation soft ware and has had a presence in Huntsville for 30 years. Sirsi was formerly a tenant in downtown Huntsville before moving to CRP aft er its merger with Dynix in 2006. • CDL Systems USA, a company that specializes in the development of control station soft ware for unmanned vehicle systems, opened an offi ce in Huntsville. Th e move will allow CDL to better support the U.S. Army.
• URS Corporation, a fortune 500 government contractor, held a grand opening at its new offi ce in CRP. Th e company provides administrative, management, operations and logistics support for the Marshall Space Flight Center.• Chugach Alaska Corporation, an Alaskan Native Corporation specializing in construction manage-ment and base operations, opened a new regional center in CRP. Th e company employs 5,500 people worldwide, 400 of which are employed by Redstone Arsenal.
Major Area Tenants Include:
SAIC, Yulista, Aegis Technologies, Adtran, Cisco, Northrop Grumman, CSC, Dynetics, Lockheed Martin, BAE Systems, Camber Corporation and numerous other high-tech companies.
10 G R A H A M & C O M PA N Y | 2 0 1 1 M A R K E T S U R V E Y | H U N T S V I L L E
BRAC Update
Job Growth
Th e 2005 Base Realignment and Closure (BRAC) project is responsible for bringing thousands of new jobs to Redstone Arsenal and is scheduled for com-pletion in September 2011. Th us far about 2,900 of the 4,700 new jobs have been fi lled.
Th e job growth related to BRAC should continue, especially in the off -post contractor support fi eld. Th is expected increase in the indirect job category should bring 15,000 new positions to Huntsville and the surrounding area. Since the year 2000, the Huntsville area has led the State of Alabama with a net job growth of 24,200 positions.
Th is rise in job growth has prompted the need for additional offi ce space in the vicinity of Redstone Arsenal. Redstone Gateway, an Enhanced Use Lease (EUL) multi-use project, will create over 4 million sf of offi ce, retail, academic and entertainment space. Th e project, a partnership between Corporate Offi ce Properties Trust and Jim Wilson and Associates, will encompass 468 acres of land at Redstone Ar-senal’s entrance. Construction of the project will begin in 2011.
MILITARY COMMANDS JOBS CREATED
HQ ARMY MATERIAL COMMAND 1,354
HQ U.S. ARMY SPACE & MISSILE DEFENSE 246*
HQ U.S. ARMY SECURITY ASSISTANCE COMMAND 367*
MISSILE DEFENSE AGENCY BRAC 2,248
AVIATION TECHNICAL TEST CENTER 323*
2ND RECRUITING BRIGADE 75*
2ND MEDICAL RECRUITING BATTALION 14*
ROTARY WING CENTER 50
THE NEW MILITARY COMMANDS AND
THE NUMBER OF NEW JOBS RELATED TO THE MOVE
* All positions have been moved to Redstone Arsenal
U.S. ARMY MATERIAL COMMAND HQ400,000 sf headquarters to be completed in 2011.
11G R A H A M & C O M PA N Y | 2 0 1 1 M A R K E T S U R V E Y | H U N T SV I L L E
BRAC Update
Photos of the U.S. Army Material Command
Headquarters and the Missile Defense Agency’s
Von Braun III are courtesy of the Chamber of
Commerce of Huntsville/Madison County.
Helicopter photo courtesy of Yulista.
Construction
Over 2.4 million sf of new construction was imple-mented to provide new and/or upgraded facilities for the incoming commands. Th is resulted in over $450 million of new construction monies spent. Th e largest projects include the U.S. Army Material Command Headquarters and the Missile Defense Agency’s Von Braun III.
History of Redstone Arsenal
Redstone Arsenal was built in 1941 to produce con-ventional chemical ammunition for use in World War II. Th e fi rst ballistic missile was later developed on Redstone by Dr. Wernher von Braun and his team of German scientists. Th is later led to the establish-ment of NASA’s Marshall Space Flight Center in 1960. Redstone is now home to the U.S. Army Avia-tion and Missile Command (AMCOM), the Space and Missile Defense Command, numerous Program Executive Offi ces (PEO), and major components of the Defense Intelligence Agency and the Missile Defense Agency.
MISSILE DEFENSE AGENCY’S VON BRAUN III800,000+ sf facility to be completed in 2011.
Helicopters engineered by Yulista provide support to
the U.S. Army stationed at Redstone Arsenal.
POSITION # OF EMPLOYEES
ACTIVE SOLDIERS 1,000
GOVERNMENT CIVILIAN WORKERS 18,800
GOVERNMENT CONTRACTOR WORKERS 17,000
GENERAL OFFICERS 13
SENIOR EXECUTIVE SERVICE MEMBERS 121
THE 2011 TOTAL WORKFORCE OF REDSTONE ARSENAL
WILL INCLUDE OVER 36,000 EMPLOYEES
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CRP WEST CRP EAST
2010RETAIL MARKET TOTAL SF VACANT SF 2007 2008 2009 2010
UNIVERSITY WEST 3,738,343 SF 616,641 SF 10.47% 19.93% 18.62% 16.50%
HIGHWAY 72/MADISON 2,201,360 SF 194,365 SF 9.50% 7.43% 6.97% 8.83%
JONES VALLEY/HAMPTON COVE 1,857,132 SF 69,354 SF 7.18% 4.42% 4.42% 3.73%
SOUTH HUNTSVILLE 2,202,869 SF 197,038 SF 10.75% 8.86% 6.55% 8.94%
NORTH HUNTSVILLE 1,748,843 SF 193,312 SF 8.15% 10.61% 10.78% 11.05%
HARVEST 99,600 SF 9,400 SF -- -- 18.07% 9.44%
TOTAL RETAIL 11,848,147 SF 1,280,110 SF 9.12% 12.0% 11.11% 10.80%
VACANCY RATE
14 G R A H A M & C O M PA N Y | 2 0 1 1 M A R K E T S U R V E Y | H U N T S V I L L E
Retail Market Overview
KROGER MARKETPLACEThe new 100,000 sf Kroger Marketplace is the
retail centerpiece of Watercress Green, a new
mixed-use development.
[ 11.8 MILLION SF TOTAL ]
HUNTSVILLE RETAIL MARKET OVERVIEW
RETAIL: According to National Real Estate Investor more than 7 million sf of retail projects slated for com-pletion in 2010 across the United States were delayed or cancelled. Th is pullback in construction resulted in only 4.1 million sf of retail space coming on line, the lowest fi gure for annual deliveries in 30 years. Th is vast reduction of retail construction partnered with an upswing in consumer spending caused the national retail vacancy rates to slightly decrease in 2010. U.S. retail spending is expected to continue its rise in 2011. Average rents on retail space decreased 3.4% in 2010. However, lease rates should stabilize in 2011, with an estimated nominal drop of 0.3%.
With little new retail product coming on line in 2010, the Huntsville market vacancy rate decreased from 11.11% in 2009 to 10.8% in 2010. Th is drop in vacancy can be largely attributed to the back fi lling of several large box vacancies in west Huntsville.
With income levels and job growth numbers that outperform the national market, the Huntsville area looks to be a place of positive momentum for retail growth beginning in 2011. Recent announcements of several new developments support this expected growth, as well as the previously vacant large box space being leased by national tenants along the Uni-versity Drive/Highway 72 corridor.
2010 Activity:
• A new 100,000 sf Kroger Marketplace opened late 2010 at Watercress Green. Th e Kroger store is the retail centerpiece of the 86-acre mixed-use de-velopment at the corner of Jeff Road and Highway 72 West.• A new 14,700 sf neighborhood center opened in Hampton Cove. Located at the intersection of High-way 431 and Sutton Road, the center is anchored by American Family Care and BancorpSouth Bank.• Aft er backfi lling the former Circuit City space with EarthFare, Huntsville Plaza continued its come-back with leasing space to Powerhouse Fitness and Jo-Ann Fabrics and Crafts. • Big Lots opened a new 28,500 sf store in the Tar-get anchored Westside Center on University Drive.
15G R A H A M & C O M PA N Y | 2 0 1 1 M A R K E T S U R V E Y | H U N T SV I L L E
Retail Market Overview
Announcements of Note:
• 30,000 sf of shop space is planned for Watercress
Green. Development will be completed in 2 phases, with phase I set for delivery mid-2011.• Village of Providence is completing the fi nal stages of a new 13,000 sf offi ce/retail building. New retail tenants at Th e Village of Providence include Madison Drugs and Sweet CeCe’s.• LW Redstone and Corporate Offi ce Properties
Trust will insert a retail component into the EUL Project. Th is retail space is planned to serve the future 4 million sf of offi ce space and 15,000 govern-ment workers and defense contractors.
• Construction has begun on St. James Place, a 70,000 sf retail development in Jones Valley. Mellow Mushroom will occupy 10,000 sf of the center upon completion.• GBT Realty announced The Shoppes of Madison – a 28 acre retail development. Th e Target anchored center will be located on Highway 72 West just east of the new Huntsville Hospital. Th e site is scheduled for completion in mid 2012.• Colonial Development announced it would begin construction on Colonial Promenade, a Super Wal-Mart anchored retail center. Construction is set to begin March 2011 with delivery to be mid 2012.
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18 G R A H A M & C O M PA N Y | 2 0 1 1 M A R K E T S U R V E Y | H U N T S V I L L E
URS
17,182 SF – Discovery Center 675 Discovery Drive, Huntsville, ALGraham represented URS in its expansion and relocation in Cummings Research Park.Agent: Jeff Wilke, CCIM, SIOR, LEED AP
106 SKYLAB DRIVE
9,600 SF – 106 Skylab Drive Huntsville, ALGraham represented the owner in the sale of this industrial facility located in Spacegate Industrial Park.Agent: Jeremy Pope, CCIM, SIOR
SOLD
Recent Graham Activities
FORMER RBC BANK
3,520 SF – 2404 Danville Road Decatur, ALGraham represented the owner in the disposition of this former RBC Bank branch offi ce to Superior Bank.Agent: Tyler Fanning
CDL SYSTEMS
3,194 SF – Perimeter Corporate Park 1525 Perimeter Parkway, Huntsville, ALGraham represented CDL Systems in its lease of offi ce space near Cummings Research Park.Agent: Bart Smith, CCIM, SIOR
BRICK HOUSE SPORTS CAFE
4,002 SF – Village of Providence 7 Town Center Drive, Suite 103, Huntsville, ALGraham represented the Brick House Sports Cafe in launching its fi rst location at the Village of Providence.Agent: David Garnett
LEASED
LEASED
FORMER SOUTHEAST AUTO PARTS
5,100 SF – 2601 Artie Street Huntsville, ALGraham represented the owner in the disposition of this former auto parts store purchased by a local chemical supply company.Agent: Jeff Wilke, CCIM, SIOR, LEED AP
LEASED SOLD
SOLD
19G R A H A M & C O M PA N Y | 2 0 1 1 M A R K E T S U R V E Y | H U N T SV I L L E
SOUTHERN RESEARCH INSTITUTE
3,272 SF – 4910 Corporate Drive, Suite H Huntsville, ALGraham represented Southern Research in its lease of offi ce space at Corporate Park located in Cummings Research Park East.Agent: Tyler Fanning
BOEING
60,000 SF – Jetplex Center 2995 Wall Triana Highway, Huntsville, ALGraham represented the landlord in Boeing’s lease renewal in Jetplex Industrial Park.Agent: Jeremy Pope, CCIM, SIOR
Recent Graham Activities
LAND IN SPACEGATE INDUSTRIAL PARK
1 Acre and 2.3 Acre Tracts – Dan Tibbs Road & Skylab Drive, Huntsville, ALGraham represented the owners in the sale of two land tracts in Spacegate Industrial Park.Agent: Jeremy Pope, CCIM, SIOR
NORTHROP GRUMMAN
33,334 SF – 330 Wynn Drive Huntsville, ALGraham represented Northrop Grumman in leasing this offi ce/lab facility located in Cummings Research Park.Agent: Bart Smith, CCIM, SIOR
FORMER WAL-MART
56,040 SF – 973 Gilbert Ferry Road Attalla, ALGraham represented the owner in the disposition of this former Wal-Mart facility.Agent: David Garnett
FARMERS FURNITURE
14,236 SF – Northgate Shopping Center 942 Brindlee Mountain Parkway, Arab, ALGraham represented the owner in leasing this anchor space to Farmers Furniture.Agent: David Garnett
LEASEDLEASED
LEASED
LEASED
SOLD
SOLD
20 G R A H A M & C O M PA N Y | 2 0 1 1 M A R K E T S U R V E Y | H U N T S V I L L E
For Sale or Lease
4950 GILMER DRIVE
500 BOULEVARD SOUTHHUNTSVILLE, AL
AVAILABLE: 1,885 SF to 2,775 SF
• Fully furnished offi ce space
• Excellent accessibility to Memorial Parkway and Redstone Arsenal
Contact: Tyler Fanning [email protected]
AIRPORT DISTRIBUTION CENTER II265 SHORT PIKE ROAD, HUNTSVILLE, AL
AVAILABLE: 208,000 SF
• Divisible by 78,000 sf and 52,000 sf
• Controlled industrial park
• Excellent interstate access
Contact: Jeff Wilke, CCIM, SIOR, LEED AP [email protected]
500 BOULEVARD SOUTH
AIRPORT DISTRIBUTION CENTER II
FORMER CONTINENTAL CAMPUS
4950 GILMER DRIVEHUNTSVILLE, AL
AVAILABLE: 46,864 SF
• Investment property is 100% leased
• Located in Cummings Research Park
• Situated on 7.89 acres
Contact: Jeff Wilke, CCIM, SIOR, LEED AP [email protected]
FORMER CONTINENTAL CAMPUS100 ELECTRONICS BOULEVARD, HUNTSVILLE, AL
AVAILABLE: 848,107 SF
• Located in Jetplex Industrial Park with excellent access to
I-565, Huntsville International Airport and the International
Intermodal Center
• Situated on 114 acres
Contact: Jeremy Pope, CCIM, SIOR [email protected]
NORTH MADISON CORNERS7950 HIGHWAY 72 WEST, MADISON, AL
AVAILABLE: 1,200 SF Inline Space & Outparcel Tract
• Neighborhood retail center anchored by Star Market
• Excellent visibility along the Huntsville/Madison major retail corridor
Contact: David Garnett [email protected]
NORTH MADISON CORNERS
21G R A H A M & C O M PA N Y | 2 0 1 1 M A R K E T S U R V E Y | H U N T SV I L L E
For Sale or Lease
215 WYNN DRIVEHUNTSVILLE, AL
AVAILABLE: 14,000 SF to 44,000 SF
• Located in Cummings Research Park
• Convenient to Redstone Arsenal and I-565
Contact: Tyler Fanning [email protected]
215 WYNN DRIVE
125 ELECTRONICS BOULEVARDHUNTSVILLE, AL
AVAILABLE: 9,600 SF
• Located in Jetplex Industrial Park
• Excellent accessibility to Huntsville’s International Intermodal Center
Contact: Jeff Wilke, CCIM, SIOR, LEED AP [email protected]
125 ELECTRONICS BOULEVARD
COUNTY LINE ROAD LANDCOUNTY LINE ROAD, HUNTSVILLE, AL
AVAILABLE: 126 ACRES
• Suitable for a variety of uses
• Frontage on County Line Road available
• Situated 1/2 mile north of the proposed County Line Road/I-565 interchange
Contacts: David Garnett Jeremy Pope, CCIM, SIOR
[email protected] [email protected]
COUNTY LINE ROAD LAND
JETPLEX CENTER2995 WALL TRIANA HIGHWAY, HUNTSVILLE, AL
AVAILABLE: 9,000 SF to 17,000 SF
• Located in Jetplex Industrial Park
• 19’ ceiling height
• Dock high loading
Contact: Jeremy Pope, CCIM, SIOR [email protected]
JETPLEX CENTER
QUALITY CIRCLE355 QUALITY CIRCLE, HUNTSVILLE, AL
AVAILABLE: 81,000 SF
• Flex space comprised of 25% offi ce/75% industrial
• Divisible to 21,000 SF
• Located in Thornton Research Park
Contacts: Tyler Fanning Jeremy Pope, CCIM, SIOR
[email protected] [email protected]
QUALITY CIRCLE
22 G R A H A M & C O M PA N Y | 2 0 1 1 M A R K E T S U R V E Y | H U N T S V I L L E
For Sale or Lease
MADISON BUSINESS PARK SOUTH
PHYSICIANS’ PLAZA4810 WHITESPORT CIRCLE, HUNTSVILLE, AL
AVAILABLE: 2,000 SF to 19,000 SF
• Medical offi ce building located on the campus of Crestwood Medical Center
• Model suites and shell space available
Contact: David Garnett [email protected]
FORMER DELPHI PLANTS 21 & 236275 HIGHWAY 31 SOUTH, ATHENS, AL
AVAILABLE: 1,306,700 SF
• Dual 161,000 volt electrical feeds directly from TVA
• One P & H 50-ton bridge crane spanning width of high-bay area in each plant
• Situated on 284 acres
Contact: Jeff Wilke, CCIM, SIOR, LEED AP [email protected]
PHYSICIANS’ PLAZA
FORMER DELPHI PLANTS 21 & 23
IRWIN SQUARE
MADISON BUSINESS PARK SOUTHDUNLOP BOULEVARD, HUNTSVILLE, AL
AVAILABLE: 10,000 SF to 62,000 SF
• Effi cient offi ce park with immediate access
to I-565 and Highway 20
• Close to Redstone Arsenal, Cummings Research Park, and
Huntsville International Airport
Contact: Jeremy Pope, CCIM, SIOR [email protected]
IRWIN SQUARE7559 HIGHWAY 72 WEST, MADISON AL
AVAILABLE: 1,260 SF to 2,520 SF
• Located on the Huntsville/Madison major retail corridor
• Vanilla shell build-out included with 3-year term
• Signalized entrance at Nance Road provides convenient
ingress/egress
Contact: David Garnett [email protected]
1506 INDUSTRIAL BOULEVARDBOAZ, AL
AVAILABLE: 101,034 SF
• Situated on 19 acres
• 7 interior cranes; 2 exterior cranes
• 2,500 KVA power
Contact: Jeremy Pope, CCIM, SIOR
1506 INDUSTRIAL BOULEVARD
23G R A H A M & C O M PA N Y | 2 0 1 1 M A R K E T S U R V E Y | H U N T SV I L L E
Graham Huntsville Group
JEREMY POPE, CCIM, SIOR
VICE PRESIDENT
JOINED GRAHAM & COMPANY: 2000
AFFILIATIONS/HONORS:
• Certifi ed Commercial Investment
Member (CCIM) designation
• Society of Industrial & Offi ce
Realtors (SIOR) designation
• Member of National Association
of Industrial & Offi ce Properties (NAIOP)
• Huntsville Madison County Leadership Alumni
• AIDS Action Coalition, Board Member
• Early Works Foundation, Board Member
CLIENTS INCLUDE:
• Tyco • Owens Corning • Intergraph • DirectBuy
• Kuehne & Nagel • Harris Corporation • Siemens
• Willbrook Solutions • Wolseley • Ferguson
• International Truck & Engine • Continental
TYLER FANNINGASSOCIATE
JOINED GRAHAM & COMPANY: 2007
AFFILIATIONS/HONORS:
• CCIM Candidate (Certifi ed
Commercial Investment Member)
• Huntsville Rotaract Club,
Member
• Committee of 100 Young Professional Initiative, Member
• Huntsville High School Wrestling Coach
CLIENTS INCLUDE:
• Mitre • Bayview Financial • Prometric • RBC Bank
• Southern Research • DRS • LYBD Engineering
• Corcoran/Maddox Companies
BART SMITH, CCIM, SIOR
MANAGING BROKER
JOINED GRAHAM & COMPANY: 2002
AFFILIATIONS/HONORS:
• Certifi ed Commercial Investment
Member (CCIM) designation
• Society of Industrial & Offi ce
Realtors (SIOR) designation
• Huntsville Rotary Club, Member
CLIENTS INCLUDE:
• Sanmina-SCI • Northrop Grumman • Cisco
• Stanley Corporation • Wachovia Securities
• Texas Instruments • ATK • DirecTV
JEFF WILKE, CCIM, SIOR, LEED AP
VICE PRESIDENT
JOINED GRAHAM & COMPANY: 2000
AFFILIATIONS/HONORS:
• Certifi ed Commercial Investment
Member (CCIM) designation
• Society of Industrial & Offi ce
Realtors (SIOR) designation
• Economic Development Association of
Alabama (EDAA), Member
• United States Green Building Council, Member
CLIENTS INCLUDE:
• Cinram • URS • Kohler • UPS • The Boeing Company
• AT&T • Sonoco Products Company • Alfa • Red Hat
• Smith Barney • Royal Cup • Delphi
DAVID GARNETTASSOCIATE
JOINED GRAHAM & COMPANY: 2007
AFFILIATIONS/HONORS:
• CCIM Candidate (Certifi ed
Commercial Investment Member)
• Huntsville/Madison County
Auburn Club, Board Treasurer
• University of Alabama in Huntsville (UAH)
Alumni Association Board Treasurer
CLIENTS INCLUDE:
• Tailwinds Development • State Farm Insurance
• Michael Collard Properties • Atlanta Dental Supply
• Marco’s Pizza • American Family Care
Graham Huntsville Group
MARSHANNE CASTRO,CPM, LEED AP
VICE PRESIDENT,RETAIL & BUSINESS DEVELOPMENT
JOINED GRAHAM & COMPANY: 2003
AFFILIATIONS/HONORS:
• Member of Institute of Real
Estate Management (IREM)
• Member of Building Owners
and Managers Association International (BOMA),
Huntsville Association Past President
• Member of International Council of Shopping
Centers (ICSC)
• Certifi ed Property Manager (CPM) designation
• United States Green Building Council, Member
• North Alabama Boys & Girls Club,
Corporate Board Member
AREAS OF EXPERTISE:
• Offi ce and Retail Property Management
• Client Retention
• Tenant Construction
• Project Coordination
• Community Relations
JASON DUGGER, RPA, FMA
PROPERTY MANAGER
JOINED GRAHAM & COMPANY: 2000
AFFILIATIONS/HONORS:
• Member of Building Owners
and Managers Association
International (BOMA),
Huntsville Association
Educational Chair
• Real Property Administrator
(RPA) designation
• Facilities Management Administrator
(FMA) designation
AREAS OF EXPERTISE:
• Real Estate Management
• Customer Service & Administration
• Environmental Health and Safety
• Facilities Planning and Project Management
• Design and Operations of Building Systems
24 G R A H A M & C O M PA N Y | 2 0 1 1 M A R K E T S U R V E Y | H U N T S V I L L E
ANDY WEAVERCHRIS NICHOLS RODNEY REID
BUILDING ENGINEERS
ERIKA HARLESS MELANIE KNIGHT
REAL ESTATE ASSISTANTS
Graham & Company’s building engineering staff promptly addresses tenant needs
with a “solutions-oriented” approach, offering professional and reliable service.
110 Offi ce Park Drive
Suite 200
Birmingham, AL 35223
TEL 205.871.7100
FAX 205.871.3331
| B I R M I N G H A M
grahamcompany.com
200 Westside Square
Suite 800
Huntsville, AL 35801
TEL 256.382.9010
FAX 256.382.9011
| H U N T S V I L L E
550 Water Street
Suite 1225
Jacksonville, FL 32202
TEL 904.281.0003
FAX 904.281.0849
| J A C K S O N V I L L E
120 Richard Jackson Blvd.
Suite 210
Panama City Beach, FL 32407
TEL 850.563.1500
FAX 850.563.1504
| G U L F C O A S T
PRINCIPALS
Steve Graham, MAI, CRE®
Mike Graham, CPM, SIOR
Gardner Lee, CPM, SIOR
MANAGING BROKER
Bart Smith, CCIM, SIOR
PROPERTY MANAGEMENT
Jason Dugger, RPA, FMA
OFFICE & INDUSTRIAL
Tyler Fanning
David Garnett
Jeremy Pope, CCIM, SIOR
Jeff Wilke, CCIM, SIOR, LEED AP
RETAIL &BUSINESS DEVELOPMENT
Marshanne Castro, CPM, LEED AP
REAL ESTATE ASST.
Erika Harless
PROPERTY MANAGEMENT ASST.
Melanie Knight
BUILDING ENGINEERS
Chris Nichols
Rodney Reid
Andy Weaver
GRAHAM & COMPANY PERSONNEL – HUNTSVILLE
MEASURE US BY OUR ACTIONS
A B O U T G R A H A M & C O M P A N Y
Founded in 1978, Graham & Company is a full-service commercial real estate fi rm based in
Birmingham. With offi ces in Birmingham and Huntsville, Alabama and Jacksonville and Gulf Coast,
Florida, the company offers professional services including sales, leasing, property management,
appraisal, consulting, investment and development. In response to client demand, Graham has
systematically extended its range of services and geographic reach, now serving clients throughout
Alabama and several surrounding states.
A F F I L I AT I O N S
NAIOP–National Association of Industrial & Offi ce Properties
LEED–Leadership in Energy and Environmental Design
SIOR–Society of Industrial & Offi ce Realtors
ICSC–International Council of Shopping Centers
CCIM–Certifi ed Commercial Investment Member
CRE®–Counselors of Real Estate
IREM–Institute of Real Estate Management
BOMA–Building Owners and Managers Association
INDIVIDUALMEMBERSHIPS
INDIVIDUALMEMBERSHIPS
Appraisal Institute
MEASURE US BY OUR ACTIONS
200 Westside Square, Suite 800Huntsville, AL 35801TEL 256.382.9010FAX 256.382.9011
grahamcompany.com
BIRMINGHAM HUNTSVILLE JACKSONVILLE GULF COAST