The Graham Report 2020: Market Survey, Huntsville

THE GRAHAM REPORT M ARK E T S URV E Y | H U N TSV ILLE

2020

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Graham Report 2020 Industrial Overview • Jetplex • North/Central • Chase • Greenbrier Office Overview • Central Business District • Jetplex/Madison • Cummings Research Park Map • Cummings Research Park Graham Services Graham Transactions & Availabilities About Graham

GRAHAM REPORT 2020 HUNSTVILLE, ALABAMA

The Huntsville commercial real estate market experienced another stellar year in 2019 with all sectors showing lower vacancies. Activity has been especially strong in the Central Business District (CBD), where four new hotels are under construction, as well as Cummings Research Park (CRP) and the Greenbrier area.

The office market continued to improve with 10.40% vacancy and positive absorption of 81,000 sf. CRP was once again the most active market with several large projects including BAE, Blue Origin, and Radiance Technologies nearing completion. Additionally, Redstone Gateway is adding several new office buildings to its campus.

Demand for industrial space remained strong as reflected in the 5.84% vacancy rate. Several large blocks of space were leased in 2019 and the outlook continues to be healthy. The industrial market has experienced a shortage of new construction, but that should be changing in the next two to three years as several developments have been announced in the Jetplex and Greenbrier markets.

Land prices continue to escalate in the CBD with recent comps trending to more than $50 psf for prime locations. Retail development remains active, especially in mixed-use properties like Mid-City and Stovehouse. Multi-family development is still active with several projects under construction.

INDUSTRIAL OVERVIEW

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Graham & Co | 2020 GRAHAM REPORT | HUNTSVILLE, AL

HUNTSVILLE INDUSTRIAL OVERVIEW Vacancy for Huntsville’s industrial market decreased to 5.84% in 2019, down from 7.64% the previous year. The rate represents the lowest vacancy experienced since 2008.

Huntsville’s market was still slightly above the national vacancy rate of 4.43%.

Rental rates increased by 5.1% nationwide.

Rates are also expected to increase in the Huntsville market as supply remains low.

Huntsville’s industrial market had positive absorption of 1.6 million sf in 2019, marking the largest positive absorption in more than a decade, and bringing the total absorbed since 2012 to more than 3.5 million sf.

Nationally, new construction was down slightly in 2019 with 224 million sf built. Several smaller industrial buildings were constructed, but a large, spec, class-A, industrial facility has not been built in the Huntsville market in many years. Land prices for industrial projects have increased, especially in the Greenbrier and Spacegate areas. Land that was previously selling for $40k per acre or less is now selling for more than $50k per acre.

The investment market for industrial product was still among the top performing sectors with an average cap rate below 6.50%. Some

recent industrial sales in the Huntsville market yielded cap rates in the low to mid 8% range.

Huntsville has a much lower average lease term than most other markets. The outlook remains bullish for the industrial sector as finance rates remain low and demand for e-commerce products remains high.

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ANNOUNCEMENTS OF NOTE IN 2019: Several suppliers announced plans to locate near the Mazda Toyota Manufacturing U.S.A. (MTMUS) facility: • Hirotec America will be creating 100 new jobs at a facility in Fayetteville, TN. • DaikyoNishikawa US is building a $110 million facility on the MTMUS campus where it will eventually employ 380 people.

• Y-tec Keylex Toyotetsu (YKTA) announced plans to build a $220 million manufacturing facility on the MTMUS campus and will create 650 new jobs.

• Toyota Boshoku will be building a $50 million plant in Athens.

INDUSTRIAL ABSORPTION FEET

2,000,000

SQUARE

1,500,000

• Vuteq is investing $60 million for a manufacturing facility where it will employ 200 employees once the facility is complete in late 2020.

Aerojet Rocketdyne held a ribbon-cutting for its new rocket propulsion Advanced Manufacturing Facility. The 136,000 sf building was constructed in North Industrial Park and will be used to produce advanced propulsion products for the THAAD program as well as other U.S. defense and space programs. Aerojet also recently leased a 122,000 sf office building in CRP.

VACANCY RATES

2019: 1,600,000 1,987,000 SQUARE FEET

• Sanoh America will create a manufacturing plant in Huntsville.

SQUARE FEET

1,000,000 500,000

MARKET

SINGLE TENANT

MULTI TENANT

Jetplex

8.75%

3.81%

7.10%

North|Central

0.01%

29.25%

7.20%

Chase

6.50%

0.00%

6.36%

Greenbrier

0.00%

0.00%

0.00%

OVERALL

0 -500,000

2015

MARKET

Single Tenant Multi-Tenant Total Industrial

2016

2017

SF

2018

2019

VACANT SF

2019

2018

2017

2016

2015

19,943,320 SF

996,203 SF

5.00%

7.87%

4.72%

4.70%

2.27%

4,740,575 SF

445,430 SF

9.40%

6.87%

10.20%

14.28%

22.69%

24,683,895

1,441,633 SF

5.84%

7.64%

5.97%

6.86%

7.06%

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Graham & Co | 2020 GRAHAM REPORT | HUNTSVILLE, AL

JETPLEX INDUSTRIAL MARKET

Jetplex Center

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[ 10.8 MILLION SF TOTAL ] OVERALL VACANCY 7.10% SINGLE TENANT 8.75% MULTI-TENANT 3.81% Recent developments in the Jetplex Industrial Market: •

Navistar announced plans to build a 300,000-sf facility that will employ 145 full time employees. The site selected is adjacent to its current building. Navistar received some incentives from the City of Huntsville and the Airport Authority to help in landing the deal.

•

A portfolio of industrial buildings totaling more than 320,000 sf traded at a cap rate just under 9.0%.

Major area tenants include: Navistar, Kohler, SES, & Georgia Pacific.

Vacancy for Jetplex Industrial Park decreased to 7.10% in 2020, down from the previous year’s rate of 8.75%. While the largest block of vacancy is 550,000 sf in the former Navistar plant location, vacancy for the Jetplex area remained low overall.

Jetplex Industrial Park is Huntsville’s largest industrial base, representing 45% of the Huntsville industrial market.

Comprised of several smaller markets that surround Huntsville International Airport and the Intermodal Center, Jetplex Industrial Park offers Foreign Trade Zone #83 and U.S. Customs Port of Entry.

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Graham & Co | 2020 GRAHAM REPORT | HUNTSVILLE, AL

NORTH/CENTRAL INDUSTRIAL MARKET

Facebook Huntsville Data Center

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[ 4.75 MILLION SF TOTAL ] OVERALL VACANCY 7.20% SINGLE TENANT 0.01% MULTI-TENANT 29.25% Recent developments in the North/Central Industrial Market: •

The 970,000 sf Facebook data center under construction in North Industrial Park is targeted to open in 2020. The cost of the facility is estimated to be close to $750 million once completed.

•

The 400,000 sf Blue Origin engine propulsion facility in Cummings Research Park West is on schedule to open in 2020.

Major area tenants include: Toyota, Aerojet Rocketdyne, Blue Origin, and Dynetics.

The North/Central Huntsville industrial market is comprised of 4.75 million sf and represents 20% of the total Huntsville industrial market. Vacancy for this market increased to 7.20% in 2019, up from 1.59% in 2018. A 300,000-sf facility on Diamond Drive in Thornton Research Park accounts for the largest vacancy.

Most buildings in this market have smaller footprints than buildings in Jetplex or Chase.

Many facilities in this market have been recently constructed along the Highway 53 corridor, providing good access to North Alabama and Southern Tennessee. The tenant mix in the area consists of companies in the automobile industry, local and national service companies, and defense companies.

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Graham & Co | 2020 GRAHAM REPORT | HUNTSVILLE, AL

CHASE INDUSTRIAL MARKET

130 Vintage Drive

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[ 5.2 MILLION SF TOTAL ] OVERALL VACANCY 6.50% SINGLE TENANT 6.36% MULTI-TENANT 0% Recent developments in the Chase Industrial Park: •

Two of the three vacant buildings in the former Qualitest Campus were leased by a pharmaceutical company and a defense company.

•

Mitchell Plastics completed its 130,000 sf expansion of its existing facility.

Major area tenants include: J and J South Central, Cinram, PPG Industries, Mitchell Plastics, Hart & Cooley, Kommerling, and Schwarze Industries.

Two large leases were signed in 2019 that helped decrease vacancy in Chase Industrial Park to 6.50%, down substantially from the prior year’s 15.63%. Only one of the three former Qualitest buildings remains available for lease.

Chase Industrial Park is comprised almost exclusively of single-tenant employers.

Chase represents 22% of the entire Huntsville industrial market and was developed by the Madison County Commission. Products manufactured in the park include automobile supplies, plastic products, and home building supplies.

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Graham & Co | 2020 GRAHAM REPORT | HUNTSVILLE, AL

GREENBRIER INDUSTRIAL MARKET

Mazada/Toyota Manufacturing USA Plant.

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[ 3.92 MILLION SF TOTAL ] OVERALL VACANCY 0% SINGLE TENANT 0% MULTI-TENANT 0% Recent developments in the Greenbrier Industrial Park: • Warrior Tractor is moving its Athens location to a new 50,000 sf building in the Greenbrier market. The company is a John Deere dealer and will also offer parts and service.

•

Penske Trucking purchased land near the Greenbrier/I-565 interchange. The company plans to have a building under construction in 2020.

•

Redstone Federal Credit Union is opening a bank branch in the Greenbrier area to prepare for the influx of jobs expected the area.

Major area tenants include: GE Aviation, Target, Fed Ex.

Occupancy in the Greenbrier Industrial market is currently 100%.

Several new construction projects, including the Mazda Toyota plant, are being developed that will raise the total sf in the area to more than 6 million sf by 2022. Most of the companies located in the area are in the automotive, services and transportation industries.

SEGERS ROAD

MOORSVILLE ROAD OLD HWY 20

RIE R

GARRETT ROAD

G REENB

Greenbrier is an ideal location for companies that have logistics and transportation needs in the North Alabama and Southeastern markets. Interstates I-65 and I-565 intersect near Greenbrier and serve as a key access point for companies in the automotive, services, and defense industries. Rail access is also available in the area.

P KWY

BIBB GARRETT ROAD SWANCOTT ROAD

OFFICE OVERVIEW

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Graham & Co | 2020 GRAHAM REPORT | HUNTSVILLE, AL

HUNTSVILLE OFFICE OVERVIEW The Huntsville office market continued to improve in 2019 with a vacancy rate of 10.40%. Vacancy has decreased for four straight years from the 19.31% registered in 2015.

The office market had positive absorption of 81,000 sf in 2019. Although this is a much flatter number than the previous two years, the overall market remained active and healthy. The outlook for Huntsville’s job market remains bullish, and the tech sector should continue to lead the charge.

Vacancies were down in the Central Business District (CBD) and Jetplex/ Madison submarkets. The overall rate in Cummings Research Park was up slightly to 8.14% compared to the previous year’s 7.86%. Multi-tenant vacancy in CRP dropped to 10.61%, a dramatic improvement from the 2016 rate of 25.40%. Most vacancies were located in older, class-C buildings that might be candidates for redevelopment.

New construction in Huntsville has been active in all sectors, but most office projects were build-to-suit. No new speculative office buildings have been built in many years; however, some multiuse projects and redevelopment projects offered a small amount of spec office space. The national trend for collaborative space is being seen in Huntsville now and several of the planned live/work/play projects, like Mid-City, will be offering

an office component. Several new office construction projects are under way in the CRP market as part of consolidation efforts for several companies.

Rental rates have increased in the Huntsville market for class-A and B space.

Class-A space now leases in the low to mid $20’s psf (full service) while class-B space is in the $18.50 to low $20 psf range. Annual rent increases averaged 2% to 3%. Free rent is not being offered as much as in the past.

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VACANCY RATES

OFFICE ABSORPTION

SQUARE

FEET

7,000 2019:

81,000

SQUARE FEET

639,000

MARKET

SQUARE FEET

1,000,000 800,000 600,000 400,000

SINGLE TENANT

MULTI TENANT

OVERALL

Cummings Research Park

6.52%

10.61%

8.14%

Jetplex/ Madison

0.00%

24.58%

20.15%

Central Business District

6.31%

14.86%

8.62%

2017

2016

2015

200,000 0 -200,000

2015

MARKET

2016

2017 SF

2018

2019

VACANT SF

2019

2018

Single Tenant

8,617,354 SF

544,150 SF

6.31%

4.06%

6.32%

7.87%

13.14%

Multi-Tenant

9,841,697 SF

1,375,036 SF

13.97%

16.38%

17.53%

24.39%

25.03%

Total Office

18,459,051 SF

1,919,186 SF

10.40%

10.64%

12.26%

16.63%

19.31%

Office Announcements of Note in 2019 Huntsville’s Redstone Arsenal senior commander is expecting the number of employees to grow from 44,000 to over 50,000 employees by 2025. Plans are in place to spend $2 billion on infrastructure during the next five years. Recent and future road improvements should help the flow to and from the Arsenal. The FBI campus is growing and several new projects, including battlefield lasers and hypersonic weapons, are pushing forward the capabilities and growth of Redstone.

Dynetics, Inc. was purchased by Leidos Holdings, Inc. for $1.65 billion in cash. Headquartered in Huntsville, Dynetics employs more than 2,300 and was an employee-owned company. Dynetics provides engineering, scientific, and IT solutions to national security, cybersecurity, and critical infrastructure sectors. Leidos is a Fortune 500 company that is headquartered in Reston, VA.

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Graham & Co | 2020 GRAHAM REPORT | HUNTSVILLE, AL

CENTRAL BUSINESS DISTRICT OFFICE MARKET

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[ 3.52 MILLION SF TOTAL ] OVERALL VACANCY 14.13% SINGLE TENANT 6.31% MULTI-TENANT 14.86% Recent developments in the Central Business District Office Market: • Huntsville Hospital began construction on a 375,000 sf Orthopedic and Spine Tower, the largest medical construction project since 1980. The seven-story building is scheduled to open in 2021.

•

A new Hampton Inn, Curio by Hilton, Hyatt House, and the Autograph Collection by Marriott will bring a needed supply of new hotel rooms to the downtown market once construction is completed in 2020-2021.

•

The Cadence Bank building on Clinton Avenue sold to a local investor for $5.2 million. The 16,366 sf building was built in 1988 on .86 acres. At the time of sale, the building was 100% leased.

•

The 45,000 sf Regency Center building on Meridian Street sold to a local buyer for $6,600,000. The building was built in 1987 and is leased to a mix of bankers, accountants, and financial services companies.

Major area tenants include: Regions Bank, Bryant Bank, The City of Huntsville, BB&T, Lanier Ford Attorneys at Law, Bradley, and Huntsville Hospital.

Consisting of 3.5 million sf, the CBD is dominated by business and health services sectors and is also home to city, county, and government employees. Overall vacancy in the CBD decreased to 14.13% in 2019.

The market has several development and redevelopment projects underway including four new hotels having been announced that will bring 1,000 new rooms to the area. Land is scarce, and recent land sales have seen historical highs in this market.

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Graham & Co | 2020 GRAHAM REPORT | HUNTSVILLE, AL

JETPLEX/MADISON OFFICE MARKET

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[ 1.70 MILLION SF TOTAL ] OVERALL VACANCY 20.15% SINGLE TENANT 0.00% MULTI-TENANT 24.58% Recent developments in the Jetplex/Madison Office Market: • A 60,000 sf office/medical building on Balch Road near the hospital sold as part of a portfolio sale to an out-of-state investor. •

The Town Madison project continues to progress as the 7,000-seat ballpark nears completion. Town Station, a multifamily component of Town Madison, is under construction. The office portion of Town Madison has not begun, but additional information regarding that timeline should be announced soon.

Major area tenants include: Yulista, Intergraph, Boeing, Huntsville Hospital, and Progress Bank.

Vacancy for the Jetplex/Madison office market decreased in 2019 to 20.15%, down from 23.81% the previous year. Vacancy rates in Madison have now dropped four years in a row.

Madison is one of the fastest growing cities in the State of Alabama and the demand for medical and business services remains strong. Many bank branches and medical related facilities have been built in the Madison market in the last three years.

ga Pe

Dynetics Dynetics

27 AC 7.61 AC

ive

Jackson Center

HudsonAlpha Main

8.07AC

Columbia High School

4.6 AC 9.3 AC

30 AC

Lake 3

ADTRAN

7.35 AC

35.88 AC

9.3 AC

18.12 AC

rive ath D Bob He

Jan Davis Drive

7.9 AC

Rockwell Collins 6.43 AC

11.35 AC Cubic GATR Technologies

20 AC

6.78 AC

11 AC

6.22 AC

8.7 AC Northrop Grumman 8.64 AC

14 AC

11 AC

8.2 AC

KBRwyle

10.91 AC

Eagle Drive

9.67 AC Technology Service Corporation / MTS

Northrop Grumman

6.49 AC

Raytheon Company

L3 / Summit 7 9.5 AC

BPI

Catholic High School

Diamond Drive

18 AC

DirecTV

The Bridges

Park West Center

Technology Pointe

Research Park Office Center

CRP Applications Lake 5

CINRAM

Huntsville Hospital

Bridge Street Town Centre

KBRwyle

Quality Circle

Defense Acquisition University

Parsons

CSRA / Trimble / Trident Technologies / DynCorp International / ExoAnalytic Solutions / Booz Allen Hamilton

ERC / Cummings Aerospace

Old Madison Pike

UAH Foundation (Zoned CRP West)

InterFuze

11.1 AC

6.08 AC

AEgis Technologies

7 AC

ASRC Aviagen Federal

11.78 AC Logicore

Lake 4

Decibel

SAIC / FPMI

rive

Synapse Wireless / 6.2 AC Leidos

305 Quality Circle

Highland Office Park

Progress Center

Hampton Inn & Suites Home2 Suites by Hilton

Cabela's

Huntsville Hospital ARSA, P.C. NeXolve / Graham & Co.

Thornton Research Park University of Alabama in Huntsville Foundation Hu

nt

lle svi

Int

565

at ern

ion

ir al A

por

t

U.S. Army Redstone Arsenal NASA Marshall Space Flight Center

Pr Pr

Dynam SRA

Park Place

The Point

Dynetics / Raytheon / Vencore The SI / Telephonics

10.75 AC

8.3 AC

18 AC

12.3 AC

ARC / MDA

Odys sey D

5.21 AC

Bentley

Explorer Boulevard 11.3 AC

Lake 2

Colsa

19.23 AC

6.4 AC

86 AC

Digium, Inc.

18.35 AC

43.92 AC

AeroVironment

~ 50 acres CRP Landmark Site

BAE Systems / Orbital ATK / Lake 1 BWXT

Quantum Research

ADTRAN

6.16 AC

5.91 AC

rive

19.69 AC

AT&T

uin D

Moq

10.76 AC

10 AC

Aerojet Rocketdyne

5.64 AC

9.22 AC

Colonial Center at Lakeside

Davidson 7.19 AC Technologies 7.59 AC

51.95 AC

Garver

12 AC

Gove rnors W est

7.7 AC

9.31 AC

IRS

Dynetics

10.63 AC 635 Discovery Yulista

Di sc ov er

Farrow Road

10 AC

yD riv e

CFDRC / The Smith Family Clinic for Genomic Medicine

7.8 AC

9.6 AC

S3, Inc.

Intrepid

CenturyLink 6 AC SDI / 10.34 AC Sierra Nevada

Dr 5 AC

9.6 AC

Huntsville 5 AC Utilities 3.2 AC Rolls Royce /

5 AC

it h Sm

8.47 AC

9.2 AC

rd va ule o B er lor Exp

6.57 AC

10.6 AC

5 AC

10 AC

15.47 AC

HII

k C. Mar

Future Development

10.75 AC

6.04 AC

Complex

Research Park Boulevard

Dynetics 10.09 AC

8.75 AC

7.97 AC

12.71 AC

Education Network

MTA / Gideon

18 AC

Voyager Way

12.38 AC

Industries

7 AC 6.5 AC Bldg. 2 HII Future Research Bldg. 1 URS / Siemens / i3 / MCR M3 Superior Solutions 11 AC Qualis Bldg. 3 T&W Operations / Discovery Place LSINC / NetWorx Trideum 24 AC 13.26 AC Delta 6 AC Kord Research 5.35 AC 5 AC Technologies

Dynetics

10.64 AC 7.3 AC

9 AC

10.23 AC

26.79 AC

s su

11.92AC

21 AC

Enterpr

Dynetics 14 AC

Dynetics Field

6.75AC

11.96 AC

Geoce

IQ

72 AT Solution / SESI / KLO EADS Corporate Office Park Stratolaunch / Snelling Johnson Controls / Corporate Drive Moog / Red Hat Sigmatech / Faulkner PeopleTec Victory Solutions / Vertiv University Technology Center BRC Social Security Strayer University Lockheed Administration Chugach Baron Martin Services A-P-T Yulista Kratos Defense & 401 Wynn Research / Qualitest Radiance Security Drive SEAC Technologies, Inc. Solutions Research Drive

North Campus Residence Hall

ent

Strata-G Solutions

Bevill Center

University Center/ Exhibit Hall

Roberts Hall/Roberts Recital Hall

Central Campus Amphitheater Residence Hall

Paragon at 511

Nursing Building

Salmon Library

Lockheed Martin

Wilson Hall/ Wilson Theatre Chan Auditorium Business Administrative Building Charger Union Shelby Center for Science & Technology

SWIRLL (Severe Weather Institute Research and Lightning Laboratory) Robert “Bud” Cramer Research Hall Benchmark (NSSTC & NOAA Weather Electronics Forecasting Office)

Willbrook Solutions 4815 Bradford

Teledyne Brown Engineering

Northrop Grumman Technical Micronics Controls

Ares Corp.

UAH SMAP

215 Wynn Drive

e gy Driv

lo Techno 106 Wynn Drive

Union Grove Gallery & Meeting Hall

ROC/CAMO Spacehab

103 Wynn Drive

General Dynamics

Advanced Systems Technology (United Technologies)

Student Service Building

nt D ow

ow n

University Fitness Center

Intermodal Parking Facility Public Safety Charger Village Food Court Charger Village I

Engineering Building/ Admissions

Fraternity/ Sorority Row Southeast Campus Housing

Credit Union Optics Building

McDonnell Douglas Auditorium Materials Science Building

Charger Park

Wernher von Braun Research Hall Solar Energy Research

Shelbie King Hall AAR Integrated Technologies

Holmes Avenue

Charger Way

Business Services Building/ Copy Center

Olin B. King Technology Hall

Spragins Hall

ves Dr ive

ue

Lockheed Martin

306 Wynn Drive Amtec

AT&T

More than 50 Years of Success 3,843 acres 11.8 million square feet Almost 300 companies total More than 26,000 employees 13,258 enrolled college students

Av en

Tecvox

Gilmer Drive

Cummings Research Park

BizTech

Ben Graves Drive

es

Sparkman Drive

SPS / MSSI Fire Station #12

KRS, LLC / F1 Solutions 4975 Redstone Bradford Federal Credit Union

mic Concepts /

lm

DESE Research / SENTAR MBDA / Titertek Instruments

Bradford Drive

RFCU SimTech / Aranea Solutions / U.S. Army Corps of Engineers

Ho

Frank Franz Hall

Morton Hall

University Greenway

Avion

Wynn Dri ve

Intuitive Center at Research Center Gleason Research Associates / INTUITIVE / Research Place Pinnacle Solutions Rainbow Daycare Sikorsky Northrop Aircraft Grumman remier Selex Galileo / eschool Hawk Enterprises

Studio 106 Executive Plaza Office Park

Ben Gra

Shearer & Associates

John Wright Drive

TARCOG

OMI

Drive University

ts Hun

Physical Plant Johnson Research Central Receiving WLRH Center & Shipping Radio Propulsion Station Research Lab

vill

e

May 2018

Established in 1962, Cummings Research Park (CRP) is one of the largest and most-respected research parks in the world. Since its inception CRP has grown to become the second-largest science and technology park in the U.S. and fourth-largest in the world.

CRP West Interior Lots

(Lots that do not front Park boulevards, and must be accessed via non-boulevard roads)

CRP, as shown here, encompasses 3,843 acres and includes nearly 12 million square feet of administration, laboratory, research and development, classroom and manufacturing space.

Boulevard Non-Access Lots

Approx. 310 acres of land are available for development in CRP West. In order to stimulate economic development and investment, the price of land per acre in CRP is significantly lower than adjacent property, providing an attractive incentive for new and expanding companies.

Boulevard Access Lots

Land parcels in CRP West range from four acres (minimum) to 18 acres, but may also be reconfigured to meet company requirements. For each parcel, the City of Huntsville will complete basic site preparation including road access, curbing, drainage, telecommunications, and utilities to the site.

Outside of official CRP boundaries

CummingsResearchPark.com

(Lots that have property frontage on boulevards, but are accessed from non-boulevard roads) (Lots that have property frontage on and are directly accessible via boulevards)

Lakeside Lots

Acreage depicted on this map should be confirmed with CRP Director if interested.

For more information and undeveloped land prices, contact Erin Koshut at 256.535.2086 or ekoshut@hsvchamber.org Scale in Miles

0

1/4

1/2

3/4

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Graham & Co | 2020 GRAHAM REPORT | HUNTSVILLE, AL

CUMMINGS RESEARCH PARK OFFICE MARKET

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[ 13.22 MILLION SF TOTAL ] OVERALL VACANCY 8.14% SINGLE TENANT 6.52% MULTI-TENANT 10.61%

The Cummings Research Park (CRP) market remained steady as overall vacancy increased slightly to 8.14% and multi-tenant vacancy fell to 10.61%. CRP is the largest office market in Huntsville with more than 12 million sf, exceeding 70% of the total Huntsville office market. It is the second largest research park in the United States.

Many companies in CRP are defenserelated and depend on the government for the funding of military projects.

Money allocated for defense programs has improved, and many of the companies in CRP have expanded their footprints in the last three years. Most companies in CRP act in a support role to meet various demands for military installations located on Redstone Arsenal. Redstone is home to the U.S. Army Aviation and Missile Command (AMCOM), the Space and Missile Defense Command, numerous Program Executive Offices (PEO), and major components of the Defense Intelligence Agency, and the Missile Defense Agency.

Recent developments in the Jetplex/Madison Office Market: • The Alabama School of Cyber Technology and Engineering announced plans to locate a magnet high school in CRP East. The school will set up a temporary location beginning in August 2020 and will then relocate to its new building at the intersection of Bradford and Wynn Drive by 2022.

• The recently completed Radiance Technologies facility at 310 Bob Heath Drive was sold to an out-of-state investor for a cap rate just under 7%. The building was built by Triad Properties and is 103,721 sf.

• Yulista Holdings announced plans to consolidate its operations into four buildings at Redstone Gateway. The company will lease 300,000 sf of office and R&D space in the development.

• The 350,000 sf Blue Origin facility is now complete, and the next generation BE-4 engine should be in production by midyear. Blue Origin is headquartered in Kent, Washington. The $200 million facility was delivered in just over a year and will also be building the BE-3U hydrogen-fueled engine. The engines will be using the same test stands on Redstone Arsenal that were used for the Shuttle program and the Saturn V rockets.

Major area tenants include: Dynetics, Adtran, Northrop Grumman, Lockheed Martin, and numerous other high-tech companies.

GRAHAM SERVICES

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Graham & Co | 2020 GRAHAM REPORT | HUNTSVILLE, AL

GRAHAM SERVICES

DEVELOPMENT

BROKERAGE

INVESTMENT SALES

Graham & Company has a market-leading office platform with bolstered development capabilities. Graham’s clientcentric philosophy and growth-oriented approach as well as a shared culture of teamwork, integrity, and service position it to offer “best-in-class” real estate services.

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DEVELOPMENT/CONSULTING Graham & Company’s development group assembles and works closely with teams of architects, engineers, and contractors to create both build-to suit as well as speculative developments. Graham’s development group also procures financing, negotiates leases, and establishes property management systems for its development projects. Graham has been involved in the development of industrial properties, office buildings, office/service centers, and office building rehabilitation projects throughout the Southeast.

BROKERAGE Graham & Company’s brokerage division provides sales and leasing services in four key sectors of commercial real estate: office, industrial, land, and investment. Graham agents consistently rank among the best in their prospective markets. However, it’s not the numbers that reflect the Graham way, it’s the ability to examine each deal through the eyes and sensibilities of its clients that separates Graham from the other industry leaders.

INVESTMENT SALES In addition to brokerage and development, Graham & Company offers investment sales services. Our in-house team has the experience and capability to produce quality offering memorandums, actively market assets for sale, source potential investors, and successfully navigate the closing process.

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Graham & Co | 2020 GRAHAM REPORT | HUNTSVILLE, AL

CORPORATE SERVICES

Brokerage

Representing clients in the negotiation, structuring, and execution of leases

Construction Management Consulting, oversight, and project management of various build outs/ construction projects

Build-to-Suit Process

Develop custom properties and facilities to meet our client’s needs

Valuation Services

Broker opinions of value, and other financial models to better help you make wise and advantageous real estate decisions

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Facilities Management

Lease administration, portfolio management, site management, etc.

Real Estate Tax Consulting Negotiating appropriate tax valuations for existing or new properties

Strategic Planning

Developing plans to harmonize strategic business goals with property and facility decisions

Debt Solutions

Leveraging debt relations to negotiate optimal terms for new acquisitions or existing properties

Graham & Company serves corporate and institutional clients by offering a comprehensive platform of real estate services across geographic locations and property types.

GRAHAM TRANSACTIONS & AVAILABILITIES

36

Graham & Co | 2020 GRAHAM REPORT | HUNTSVILLE, AL

GRAHAM TRANSACTIONS

SOLD

LEASED

LEASED

2941 Green Cove Road Huntsville, AL 85,000 SF Graham represented the owner in the disposition of this former Palco facility to Sanmina.

127 Holmes Avenue Huntsville, AL 4,160 SF Graham represented BRPH in its lease of office space in downtown Huntsville.

255 Electronics Boulevard Huntsville, AL 42,000 SF Graham represented Tyonek in its lease of industrial space in the Jetplex area.

Bart Smith, CCIM, SIOR

Bart Smith, CCIM, SIOR

Bart Smith, CCIM, SIOR

SOLD 3751 Sullivan Street Madison, AL 1.15 ACRES Graham represented the buyer in purchasing this former bank branch to be redeveloped as a car wash.

Bart Smith, CCIM, SIOR

SOLD

LEASED

4900 Bradford Drive Huntsville, AL 30,000 SF Graham represented the owner in the disposition of this facility in Cummings Research Park.

6705 Odyssey Drive Huntsville, AL 22,673 SF Graham represented Dynetics in its lease of office space in Cummings Research Park.

Bart Smith, CCIM, SIOR

Bart Smith, CCIM, SIOR

37

LEASED

SOLD

5586 Endeavor Way Mooresville, AL 227,600 SF Graham represented Custom Assembly in its lease of this industrial facility.

1297 County Line Road Madison, AL 184,000 SF Graham served as transaction broker in the disposition of this industrial facility.

Jeremy D. Pope, CCIM, SIOR

Jeremy D. Pope, CCIM, SIOR

LEASED

LEASED 700 Boulevard South Huntsville, AL 7,346 SF Graham represented Publix in its lease of office space.

Jeremy D. Pope, CCIM, SIOR

SOLD

SOLD

450 Lanier Road Madison, AL 26,315 SF Graham represented Huntsville Hospital in its lease of this facility.

Highway 20 Decatur, AL 268 ACRES Graham represented the owner in the disposition of this land to Nucor Steel.

Washington Street Huntsville, AL 13.51 ACRES Graham represented Thrive Alabama in purchasing a land site near downtown Huntsville.

Jeremy D. Pope, CCIM, SIOR

Jeremy D. Pope, CCIM, SIOR

Jeremy D. Pope, CCIM, SIOR

Graham & Co | 2020 GRAHAM REPORT | HUNTSVILLE, AL

LEASED

LEASED

355 Quality Circle Huntsville, AL Graham represented the landlord in leasing this industrial facility to Dynetics.

Jeremy D. Pope, CCIM, SIOR Tyler Fanning, SIOR

LEASED

1003 Production Court Madison, AL Graham represented the tenant in leasing this industrial facility.

1317 Virginia Boulevard Huntsville, AL Graham represented the tenant in leasing this industrial facility.

George Twitty, Jr.

George Twitty, Jr.

Future Site of:

SUBJECT SITE Bibb Garrett Road

Greenbrier Road

Old Highway 20

Mooresville Road

38

SOLD SW Corner of Bibb Garrett Rd & I-65 Tanner, AL Graham represented the buyer in purchasing this industrial land site.

Tyler Fanning, SIOR

LEASED

SOLD

1525 Perimeter Parkway Huntsville, AL Graham represented LBYD Engineers in leasing this office space.

Peoples Road Huntsville, AL Graham represented the owner in the disposition of this land in the Greenbrier area.

Tyler Fanning, SIOR

Tyler Fanning, SIOR

39

AVAILABILITIES SALE/LEASE

LEASE

LEASE

MOORES MILL BUSINESS PARK

905 JAMES RECORD ROAD

1297 COUNTY LINE ROAD

MOORES MILL BUSINESS PARK - 150 VINTAGE DRIVE HUNTSVILLE, AL

905 JAMES RECORD ROAD HUNTSVILLE, AL

1297 COUNTY LINE ROAD MADISON, AL

AVAILABILITY: 328,931+/- SF

AVAILABILITY: Up to 116,590 SF

AVAILABILITY: 184,000 SF

• Fully conditioned facility in Chase Industrial Park • Divisible to 50,000 SF • State-of-the-art cross dock facility • 31’ Clear height

• New construction within Jetplex Industrial Park • Dock high and ground level loading • 32’ Clear height

• Located in the Jetplex area with convenient access to I-565 • 14,000 KVA power • 4 docks doors; 3 drive-in doors • 18’ - 24’ Clear height

Jeremy D. Pope, ccim, sior jeremyp@grahamcompany.com

Jeremy D. Pope, ccim, sior jeremyp@grahamcompany.com

SALE Memorial Parkway (Hwy 231/431

LOT 8 1.76 Acres

LOT 5 1.84 Acres

LOT 7 1.81 Acres

LOT 3 1.47 Acres

Jeremy D. Pope, ccim, sior jeremyp@grahamcompany.com

SALE

LEASE

N)

LOT 2 1.47 Acres

onal Drive

Inspirati 1

INSPIRATION POINTE

MADISON LAND

23366 BIBB GARRETT ROAD

HIGHWAY 231/431 MERIDIANVILLE, AL

MADISON BOULEVARD MADISON, AL

23366 BIBB GARRETT ROAD TANNER, AL

AVAILABILITY: Up to 3.57 contiguous acres

AVAILABILITY: Up to 8.3 contiguous acres

• Highly visible location along one of Madison County’s most heavily traveled thoroughfares • Utility, water and sewer connections available • Located in the county outside of the city limits

• Convenient ingress/egress via traffic signal at Research Boulevard • Highly visible location with frontage on Madison Boulevard • Close proximity to Town Madison development and the new baseball stadium

Tyler Fanning, sior tylerf@grahamcompany.com

Tyler Fanning, sior tylerf@grahamcompany.com

AVAILABILITY: Up to 305,760 SF • Class A industrial facility at the NW corner of I-65 and I-565 • Only 1.5 miles to the interstate exchange • Expandable by 200,000 SF • Custom TI packages and incentives available Bart Smith, ccim, sior barts@grahamcompany.com

40

Graham & Co | 2020 GRAHAM REPORT | HUNTSVILLE, AL

SALE/LEASE

LEASE

LEASE

26762 SUCCESS DRIVE

485 PRODUCTION AVENUE

140 SPARKMAN DRIVE

26762 SUCCESS DRIVE MADISON, AL

485 PRODUCTION AVENUE MADISON, AL

140 SPARKMAN DRIVE HUNTSVILLE, AL

AVAILABILITY: 8,285 SF

AVAILABILITY: Up to 16,500 SF

AVAILABILITY: Up to 219,000 SF

• Located in the Greenbrier area • Excellent accessibility to I-565, Jetplex and the new Toyota plant • Ground level loading with 14’ clear height • Existing air compressor and electrical busway system

• Located in the Jetplex area with convenient access to I-565 • Dock high loading • 20’ ceiling height

• Industrial/flex campus comprised of 3 buildings in Cummings Research Park East • Situated on 21.9 acres • Located in an Opportunity Zone

Jeremy D. Pope, ccim, sior jeremyp@grahamcompany.com

Bart Smith, ccim, sior barts@grahamcompany.com Tyler Fanning, sior tylerf@grahamcompany.com

Tyler Fanning, sior tylerf@grahamcompany.com

LEASE

LEASE

SALE

4820 UNIVERSITY SQUARE

4906 RESEARCH DRIVE

FORMER PNC BANK BRANCH

4820 UNIVERSITY SQUARE HUNTSVILLE, AL

4906 RESEARCH DRIVE HUNTSVILLE, AL

12310 HIGHWAY 231 MERIDIANVILLE, AL

AVAILABILITY: 135,746 SF

AVAILABILITY: 39,000 SF

AVAILABILITY: 4,520 SF

• 3 story office building just outside the Cummings Research Park boundary • Ample parking with a 4.6:1,000 parking ratio • Located in an Opportunity Zone

• Located in Cummings Research Park East • Flex facility offers a mix of office and lab space • 2 loading docks with roll-up doors

• Highly visible location along Highway 231 • Suitable for a variety of uses • Located on 0.67 acre outparcel of Flint Crossing Market Place, a Publix anchored center

Bart Smith, ccim, sior barts@grahamcompany.com Tyler Fanning, sior tylerf@grahamcompany.com

Bart Smith, ccim, sior barts@grahamcompany.com Tyler Fanning, sior tylerf@grahamcompany.com

Tyler Fanning, sior tylerf@grahamcompany.com

41

LEASE

LEASE

LEASE

2308 MERIDIAN STREET

JETPLEX CIRCLE BUSINESS PARK

OPPORTUNITY BOULEVARD

2308 MERIDIAN STREET HUNTSVILLE, AL

117 JETPLEX CIRCLE MADISON, AL

7325 OPPORTUNITY BOULEVARD HUNTSVILLE, AL

AVAILABILITY: 5,000 - 50,000 SF

AVAILABILITY: 5,400 SF

AVAILABILITY: 9,520 SF

• Storage warehouse facility • One-year minimum lease term • Yard space also available for lease

• Convenient access to I-565 and the Jetplex area • Dock high loading • 16’ - 18’ ceiling height

• New construction ready for occupancy 3Q 2020 • Close proximity to Facebook’s new data center and Toyota plant • Dock high and ground level loading • 20’ ceiling height

George Twitty, Jr. georget@grahamcompany.com

Jeremy D. Pope, ccim, sior jeremyp@grahamcompany.com

Jeremy D. Pope, ccim, sior jeremyp@grahamcompany.com

LEASE

SALE/LEASE

SALE

2601 ARTIE STREET

2013 COX AVENUE

FORMER BANK BRANCH

2601 ARTIE STREET HUNTSVILLE, AL

2013 COX AVENUE HUNTSVILLE, AL

4009 UNIVERSITY DRIVE HUNTSVILLE, AL

AVAILABILITY: 5,000 SF

AVAILABILITY: 20,000 SF

AVAILABILITY: 4,033 SF

• Central Huntsville location convenient to Memorial Parkway • Ground level loading • 3 phase power

• Two-story facility with office, warehouse and showroom areas • Located in the HUBZone near Memorial Parkway and University Drive

• Excellent visibility along University Drive • Site offers great opportunity for redevelopment • Close proximity to UAH

Bart Smith, ccim, sior barts@grahamcompany.com

George Twitty, Jr. georget@grahamcompany.com

Tyler Fanning, sior tylerf@grahamcompany.com Bart Smith, ccim, sior barts@grahamcompany.com

ABOUT GRAHAM & CO

44

Graham & Co | 2020 GRAHAM REPORT | HUNTSVILLE, AL

GRAHAM & CO – HUNTSVILLE BA RT SMITH,

J e re my D. Po p e,

CCI M, SI OR

CC IM, S IOR

M A N AG IN G B R O K E R

S E NIOR V IC E P RE S IDE NT

barts@grahamcompany.com

jeremyp@grahamcompany.com 2002

J O IN E D G R A HA M & COMPANY:

JOINE D GRAH AM & COMPANY:

2000

AF F ILIATIO N S/HO NORS:

AF F IL IAT IONS /H ONORS :

• Certified Commercial Investment Member (CCIM) designation

• Certified Commercial Investment Member (CCIM) designation

• Society of Industrial & Office Realtors (SIOR) designation

• Society of Industrial & Office Realtors (SIOR) designation

• Alabama Commercial Real Estate Center (ACRE), Leadership Council

• Member NAIOP – AL Chapter

• Alabama CCIM Chapter, VP of Board of Directors

• Huntsville/Madison County Convention & Visitors Bureau, Board Member

• Huntsville Rotary Club, Strive Mentor

C L IE NTS INC LU DE :

• Salvation Army – Advisory Board • First Methodist Church – Board of Directors CLIE N TS IN C LUDE :

• • • •

Sanmina-SCI • Northrop Grumman • Cisco • COPT Stanley Corporation • Wells Fargo Securities • DirecTV ATK • MITRE • Dynetics • AEGON • Orbital Sciences Booz Allen Hamilton • MetLife • Rockwell Collins

• • • • •

AZ Technology • Boneal Aerospace • Custom Assembly Kaman International • Parksite • Space & Rocket Center 9 Round Fitness • Intergraph • Huntsville Hospital Kuehne & Nagel • Harris Corporation International Truck & Engine

G E O R G E TW I TTY, J R .

V IC E P RE S IDE NT

georget@grahamcompany.com TY LER FANNING ,

sior

JOINE D GRAH AM & COMPANY:

2018

VIC E P R E SIDE N T

tylerf@grahamcompany.com J O IN E D G R A HA M & COMPANY:

2007

AF F IL IAT IONS /H ONORS :

Alabama Real Estate Salespersons License – 2018

AF F ILIATIO N S/HO NORS:

• Society of Industrial & Office Realtors (SIOR) designation • CCIM Candidate (Certified Commercial Investment Member)

E R I KA H A R L E SS

• Huntsville Rotaract Club, Member

erikah@grahamcompany.com

• Huntsville Committee of 100 Young Professionals Initiative, Member • Huntsville High School Wrestling Coach CLIE N TS IN C LUDE :

• MITRE • Prometric • PNC Bank • Aerospace Corporation • Stephen Gould Corporation • Wells Fargo Securities • Southern Research • DRS • LBYD Engineering

RE AL E STAT E ASS ISTANT

JOINE D GRAH AM & COMPANY:

2004

45

ABO UT G R AHAM & CO M PAN Y Founded in 1978, Graham & Co is a full-service commercial real estate firm based in Birmingham, with offices in Birmingham and Huntsville, Alabama and the Gulf Coast, Florida. The company offers professional services including sales, leasing, property management, corporate services, 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.

C O M M U N I T Y I N V O LV E M E N T At Graham & Co we recognize that our clients can enhance the value of their property, business, and/or investment if the community in which they live, and work is vibrant and healthy. Graham and its employees continue to give back to the community in a number of ways including volunteering time and energy in support of a variety of community and social causes.

A F F I L I AT I O N S NAIOP–Commercial Real Estate Development Association SIOR–Society of Industrial & Office Realtors IREM–Institute of Real Estate Management CCIM–Certified Commercial Investment Member CRE–Counselors of Real Estate

LEED–Leadership in Energy and Environmental Design ULI–Urban Land Institute

G R AHAM & CO M PAN Y P E RSO N N E L (B I R M I N G HAM) PRINCIPALS

DEVELOPMENT

PROPERTY MANAGEMENT

Mike Graham, CPM, SIOR Steve Graham, MAI, CRE

Henry Graham II

Theresa Baker Don Beaugez Thomas Michael Edward Nobinger, PA, FMA, CFM Leslie Williamson

OFFICE GROUP

Jack Brown, SIOR John Coleman, SIOR Sonny Culp, SIOR Ogden Deaton, SIOR Courtney DeShazo Joelle Rogers Jordan Tubb, SIOR

Walter Brown, SIOR Sam Carroll IV, SIOR Bo Grisham Jerry Grant, CCIM Matt Gilchrist Lauren Limbaugh Dan Lovell, SIOR, LEED AP Charles H. Simpson

INVESTMENT

CLIENT SERVICES MANAGER

GULF COAST OFFICE

Matthew Graham

Christie Neely

Jason Carnes Kevin Williams, CCIM

MARKET RESEARCH ANALYST

CORPORATE SERVICES

Matt Rowan

Hayden Scott, MAI

INDUSTRIAL GROUP

FINANCE

David Walker, CFO Tana Welch

HUNTSVILLE OFFICE

Tyler Fanning, SIOR Erika Harless Jeremy Pope, CCIM, SIOR Bart Smith, CCIM, SIOR George Twitty, Jr.

GRAPHIC DESIGN

Joel Dorning

INDIVIDUAL MEMBERSHIPS

Aerial photography provided by Marty Sellers.

HUNTSVILLE | ALABAMA

2020 OFFICE MARKET SURVEY GRAHAM & CO 305 Church Street Suite 710 Huntsville, AL 35801 256.382.9010 www.GrahamCompany.com