Investor’s Dream: Huntsville, Alabama’s Commercial Real Estate Market Continues to Soar

Investor’s Dream: Huntsville, Alabama’s Commercial Real Estate Market Continues to Soar

Huntsville, Alabama’s commercial real estate market has been experiencing a remarkable surge in recent years, catapulting it to the forefront of the state’s real estate scene.

The city, affectionately referred to as the “Rocket City,” has long been known for its contributions to the aerospace and defense industries. However, its recent success in the commercial real estate market is gaining just as much attention. The influx of major corporations has had a ripple effect on the commercial real estate market, resulting in increased demand for office space, industrial facilities, and retail properties.

Today’s article delves into the fundamental catalysts underpinning Huntsville’s thriving commercial real estate market and the reasons behind its burgeoning appeal to investors.

Thriving Business Community

At the heart of Huntsville’s success is its deep-rooted commitment to cutting-edge technology. The city’s thriving aerospace industry, bolstered by NASA’s Marshall Space Flight Center, has created a rich ecosystem of businesses that span the entire supply chain, from manufacturing to research and development. The city’s diverse economy also includes the following key industry sectors:

1. Aerospace: Huntsville has long been a hub for aerospace and defense, thanks in part to NASA’s Marshall Space Flight Center, which employs over 6,000 people in the area. Boeing, Lockheed Martin, and other major aerospace companies also have a significant presence in the area. One notable success story is Dynetics, a technology company that specializes in space, defense, and intelligence solutions. In 2020, the company was granted a colossal contract worth $470 million to engineer and construct GBU-69B Small Glide Munition. This precision guided bomb weighs 60 lbs (27 kg) and is compatible with both AC-130 gunships as well as unmanned aircraft systems.
2. Technology: Huntsville’s technology sector is rapidly growing, thanks in part to the presence of the HudsonAlpha Institute for Biotechnology, which focuses on genomic research and entrepreneurship. Several startups have emerged from the institute, including Kailos Genetics, a company that offers affordable genetic testing. Another notable Huntsville-based technology company is Adtran, a provider of networking and communications equipment that has been in business for over 30 years.
3. Healthcare: Huntsville is home to several major healthcare providers, including Huntsville Hospital, which is the second-largest hospital in Alabama. The city also has a growing biotech industry, with companies such as CFD Research Corporation, which specializes in developing medical devices and technologies.
4. Manufacturing: Huntsville has a long history of manufacturing, and the industry continues to thrive in the area. One notable company is Toyota Motor Manufacturing Alabama, which produces engines and transmissions for Toyota vehicles. The organization has promised a $222 million extension of their Huntsville factory, creating 450 new job opportunities for the local area.

Driving Factors of Commercial Real Estate Growth

The city’s booming economy, population growth, and favorable business policies have created a vibrant real estate market that shows no signs of slowing down. Here are several of the main components responsible for Huntsville’s remarkable commercial real estate market:

Population Growth

Huntsville’s population has been growing steadily over the past decade, with a +2.12 population growth percentage. This growth is expected to continue, with the city projected to add over 30,000 new residents by 2030. As the population grows, so does the demand for housing, retail establishments, and commercial real estate space.

Job Creation

Huntsville’s strong job market is another key driver of the city’s commercial real estate growth. The city is home to a thriving aerospace and defense industry, as well as a growing technology startup ecosystem.

Despite the effects pandemic, the city added new jobs, with the unemployment rate remaining below the national average. This job growth is fueling demand for commercial real estate space, particularly office and industrial space

Favorable Business Policies

Huntsville’s favorable business policies have helped to attract new businesses and investors to the area. The city has a pro-business climate with low taxes and minimal regulations, which has made it an attractive location for companies looking to expand or relocate. For example, in 2020, Huntsville was ranked number 1 among small sized metros in the United States for economic growth potential by Business Facilities Magazine.

Alabama Commerce Secretary Greg Canfield declared that the latest rankings reinforce Alabama’s capability to attract top-notch companies from around the world. As a result, his team will remain devoted towards recruiting businesses and growing our state’s economy.

Huntsville At a Glance: Key Statistics on Population Growth, Job Creation, and Commercial Real Estate Market Growth.

Huntsville has experienced strong population growth in the past decade, with a growth rate of +2.12% between 2010 and 2020. The city has added over 22,000 jobs in the past five years, and boasts a low unemployment rate of just 2.6%.

Sources: U.S. Bureau of Labor Statistics | National Association of Realtors

In terms of the commercial real estate market, the city’s office market saw positive net absorption of over 139,000 square feet in 2021, indicating strong demand for office space. Additionally, the office vacancy rate declined to just 6.60%, indicating a tight market with limited available space. This trend is likely to continue, given the strong job growth in the area and the city’s favorable business policies.

As demand for commercial real estate continues to rise, we can expect to see continued investment in new developments and increased competition for prime properties in the city.

Opportunities For Investors

Investors who are considering taking advantage of Huntsville’s flourishing commercial real estate market have plenty of opportunities to pursue. Here are a few that investors should consider:

1. Acquiring Property for Development: Investors have the opportunity to invest in commercial real estate projects like office buildings, warehouses, retail centers and multifamily residences by either buying land or acquiring existing properties.
2. Leasing Space to Businesses: Huntsville provides potential investors the opportunity to lease commercial spaces, such as office space for technology companies, retail stores for local businesses, and industrial areas for aerospace and defense corporations.
3. Participating in Public-Private Partnerships: To bolster commercial real estate projects in Huntsville, the local government has forged public-private partnerships that may provide tax breaks, infrastructure upgrades, or other assistive measures.
4. Investing in Real Estate Funds: Investors can invest in real estate funds that pool capital and invest in a range of commercial real estate projects in Huntsville and other markets. This provides exposure to Huntsville’s growth and economic development while benefiting from professional management and diversification.

At Dean Commercial Real Estate, our team of experienced real estate professionals can provide you with the guidance and expertise needed to navigate Huntsville’s dynamic commercial real estate market and seize the many opportunities it offers.

Don’t miss out on the chance to make strategic real estate investments that can generate strong returns – take action today and contact us to learn more.

Conclusion

As the city of Huntsville continues to experience an influx in population, a booming job market and amiable business climate, it is no surprise that smart investors are recognizing this as an excellent opportunity for high returns. With steady growth ahead on the horizon, now more than ever is the perfect time to invest in Huntsville!