office space tight, growing
seems like a good opportunity for a tower downtown but no mention of it
By GINA HANNAH
Times Business Writer,
[email protected]
It's widely known that the Huntsville area is seeing a housing construction boom, but office space is also on the upswing.
Compared with other cities, Huntsville's market for office space is tight, said Bart Smith, managing broker for Graham & Co./CORFAC International commercial real estate brokers. Vacancies here hover between 6 percent and 7 percent, compared with a national average of 10 percent to 13 percent, Smith said.
"Five (percent) is good for the landlords, but for growth or for tenants it isn't good because it makes it hard to find space," he said.
The Huntsville market currently has about 9.2 million square feet of office space, Smith said. During the next few years, that will change; more than a million square feet of office space is expected to be built and ready for occupancy.
Current projects include:
The Ophthalmic Ambulatory Eye Surgery Center, rising from a site on South Memorial Parkway next to the Goo Goo Express car wash. The four-story building's main floor will house the surgery center, Madison County's first free-standing eye surgery center. The second floor will be the new digs for the Maynor Mitchell Eye Center and Huntsville Laser Center. The third and fourth floors of the $8.5 million project will have office space for lease.
Drs. William Mitchell and Bob Maynor currently have their practice on Governors Drive across from Huntsville Hospital, occupying about 5,000 square feet, said Lisa Mendyke, practice administrator.
Mark Anderson Rise Real Estate Inc. on Drake Avenue, across from Parkway Place mall. The new 15,000 square-foot building will include the agency's new offices and office space for lease. Mark Anderson Rise Real Estate is currently at 3603 S. Memorial Parkway.
The enhanced-use lease site on Redstone Arsenal planned for office and retail development. The 400-acre project, located at the Arsenal's Gate 9 along Rideout Road, could add another 500,000 square feet of office space to the market, according to Redstone officials. City officials and some local business interests have raised concerns that the arsenal site could siphon tax money from Huntsville's coffers and compete with properties in the city limits.
The former Sanmina-SCI building on the southwest corner of Clinton Avenue and Memorial Parkway, which has been undergoing about $12 million in renovations. The eight-story, 96,000 square-foot building, now called Commerce Center, was purchased by Madison County's Breland Cos. in 2005. Most of the exterior work is completed, with some interior work still remaining to be done, said John Hayden of the Concourse Group, which is handling the leasing on the building. Landscaping on the site is about to begin, he said.
"As the building starts to take shape and people see how nice it's turning out, it's generating a lot of interest," Hayden said. "I think one of the things they like about the space is, you have easy access to Memorial Parkway and I-565." The building's close proximity to the post office and downtown's core also makes it an appealing site, Hayden said. Hayden said tenants should be able to move in this April. Breland Cos. is planning to use part of the space for its offices.
Bridge Street Town Centre at Cummings Research Park. The $210 million mixed-use project will have 138,000 square feet of high-end office space when it opens next fall, said Rachel Forman, spokeswoman for O&S holdings, Bridge Street's developer. Rental rates for the space will average "in the low $20s" per square foot, Forman said, compared with average market rates of $13 to $19 per square foot, depending on quality and location of the space.
Plans call for a second office tower to be built if there's a market demand, she said.
"There's been tremendous interest," she said. "Our goal is to have (the tower) 100 percent leased by the time we open."