Market Survey | Huntsville

2017

MARKET SURVEY | HUNTSVILLE

American Tire Distributors Warehouse | Photography by www.tenboair.com GRAHAM REPORT 2017 HUNTSVILLE, ALABAMA

The Huntsville commercial real estate market performed extremely well in the retail and industrial sectors in 2016. The office market showed encouraging signs of improved occupancy, hopefully signaling that the worst is behind us. Industrial vacancy fell to 6.86%, the lowest rate the Huntsville market has seen in over a decade. The Greenbrier area was once again a hot area for growth. The Huntsville Mega Site, a 1,252-acre site in Limestone County’s Greenbrier area, was officially announced as a TVA Mega Site. Polaris expanded its plant, and it now encompasses over 900,000 square feet. The GE Aviation plant is under construction and will be completed in 2017. The office market showed signs of improvement as overall vacancy rates fell for the first time since 2010, and vacancy is expected to continue to decrease. 2016 brought little new construction, and over 550,000 sf of older office product was razed. The new master plan for Cummings Research Park was announced, boosting interest in buyers. Several older properties in CRP were purchased in areas slated for redevelopment. The retail market was active once again in 2016. Vacancy dropped below 10% as several new large projects began construction. Madison Square Mall was demolished to make way for the MidCity development.

TABLE OF CONTENTS

Industrial Market Overview ...... 1

Jetplex Industrial ...... 2

North|Central Huntsville Industrial �� 3

Chase Industrial ...... 4

Office Market Overview . . . . . 5

Central Business District Office �� 6

Jetplex | Madison Office . . . . . 7

Cummings Research Park Office �� 8

Cummings Research Park Map �� 10

Retail Map ...... 12

Retail Market Overview ...... 14

Recent Graham Activities . . . . . 17

For Sale or Lease ...... 20

Graham Huntsville Group . . . . .23 2017 [ 23.3 MILLION SF TOTAL ] OVERALL VACANCY 6.86% SINGLE TENANT 4.7% Industrial Market Overview MULTI-TENANT 14.28%

HUNTSVILLE INDUSTRIAL MARKET OVERVIEW

INDUSTRIAL: Vacancy for Huntsville’s industrial quarters of consecutive positive net growth, marking market decreased for the 6th consecutive year to the longest streak in more than 20 years. 6.86% in 2016. A large amount of new building space New construction for industrial buildings was was added to the industrial market in 2016, including again a hot sector in 2016 with more than 184 million the Polaris plant in the Greenbrier area. Vacancy sf under construction. Construction is expected to rates are expected to decrease again in 2017 as little slow slightly in 2017, but should remain above the 100 new construction is planned. million sf mark. The Huntsville market is outperforming the na- The investment market for industrial product was tional vacancy rate of 8.2%, the lowest rate since 2001, healthy again in 2016 with more than 46.3 billion in and has now dropped for 26 consecutive quarters since transactions. Demand for industrial facilities contin- the rate peaked at 14.6% in the 2nd quarter of 2010. ues to drive up the value of assets and the average cap Industrial building supply is not keeping pace with rates nationally are now at 5.35%. the healthy demand from supply-chain and distribu- Industrial Announcements of Note: tion users, creating rent increases across most of the • The Huntsville Mega Site, a 1,252-acre site in nation. Rents for Class A industrial space increased by Limestone County’s Greenbrier area, was officially 6.6% in 2016, the highest increase in well over a de- announced as a TVA Mega Site. This certification cade. Rates are forecasted to increase again in 2017. process requires at least 1,000 acres with interstate The Huntsville market had absorption of 853,000 access, rail service capability and utilities capable of sf in 2016, marking the 5th year in a row of positive serving a large manufacturing company. absorption and the best performance since 2009. More than 2.2 million sf have been absorbed in the • American Tire Distributors occupied its new market since 2012. National absorption was 251 mil- 100,000 sf industrial facility located on Mastin Lake lion sf for the year. The market has experienced 27 Road near Highway 53. This project will lead to more than 100 new jobs for the Huntsville market. The HUNTSVILLE building was developed as part of a build-to-suit by INDUSTRIAL ABSORPTION Graham & Company.

2016 INDUSTRIAL MARKET VACANCY RATE

INDUSTRIAL SINGLE MULTI OVERALL MARKET TENANT TENANT

JETPLEX 6.27% 17.01% 9.51%

NORTH | CENTRAL 7.78% 5.26% 6.74%

CHASE 0% 0% 0%

HUNTSVILLE 2016 VACANCY RATE INDUSTRIAL ABSORPTION INDUSTRIAL MARKET TOTAL SF VACANT SF 2012 2013 2014 2015 2016

SINGLE TENANT 18,084,313 SF 852,517 SF 9.89% 7.78% 3.36% 2.27% 4.7%

MULTI-TENANT 5,216,120 SF 745,057 SF 17.35% 17.52% 27.22% 22.69% 14.28%

TOTAL INDUSTRIAL 23,300,433 SF* 1,597,574 SF 11.62% 10.03% 8.97% 7.06% 6.86%

* This number includes some industrial properties that do not fit within a certain submarket, but are an integral part of Huntsville’s industrial landscape.

GRAHAM & COMPANY | 2017 MARKET SURVEY | HUNTSVILLE 1 [ 13.4 MILLION SF TOTAL ] OVERALL VACANCY 9.51% Jetplex Industrial Market SINGLE TENANT 6.27% MULTI-TENANT 17.01%

Vacancy for Jetplex Industrial Park increased Recent Developments: slightly to 9.51% in 2016. Several large lease and • The 275,000 sf former Parfums De Coeur building sale transactions occurred in the Jetplex market, but located at 237 Laracy Drive sold for $4.3 million to the closing of the 550,000 sf Navistar plant had a a company relocating to the Huntsville area. The negative impact on vacancy numbers. building was originally built in 1988 and includes Jetplex Industrial Park is Huntsville’s largest in- 24.71 acres of land. dustrial base, representing 58% of the Huntsville • HDT Global announced plans to expand its op- industrial market, and comprised of several smaller erations into an existing adjacent 206,000 sf facility markets that surround Huntsville International at SouthPoint Business Park. The company manu- Airport and the Intermodal Center. Jetplex Industri- factures mobile command units and other defense al Park contains 1,470 acres and offers Foreign Trade related products to support the nation’s military. Zone #83, U.S. Customs Port of Entry and interstate access via I-565. Jetplex South Industrial Park con- • LINE-X signed a long-term, 61,450 sf lease at Jetplex tains 1,400 acres and is located just south of Jetplex Tradeport at 301 James Record Road. Industrial Park. Lowe Industrial Park is a 900-acre • Navistar vacated its 550,000 sf facility at 646 park originally designed to encompass the growth of James Record Road and moved its mid-range engine Intergraph Corporation. production to a plant in Illinois. The building was purchased by an investor with plans to lease the facility to a manufacturing or distribution company.

Major Area Tenants Include: Kohler, Remington, Yulista, SES, & Georgia Pacific.

LINE-X LINE-X supplies durable coatings used in truck bedliners, as well as advanced protective coating solutions for commercial, manufacturing, municipal and industrial needs.

2 GRAHAM & COMPANY | 2017 MARKET SURVEY | HUNTSVILLE [ 4.8 MILLION SF TOTAL ] OVERALL VACANCY 6.74% SINGLE TENANT 7.18% North | Central Huntsville Industrial Market MULTI-TENANT 5.26%

Vacancy for the North/Central Huntsville industrial • The 67 acre North Huntsville Industrial Park market decreased to 7.18% in 2016, down substan- Phase III received the Alabama Advantage Site des- tially since the 11.20% posted in 2014. The North/ ignation. This application process was managed by Central Huntsville industrial market is comprised the City of Huntsville and the Chamber of Com- of more than 4.7 million sf and represents 20% of merce. The site must meet certain size, zoning and the total Huntsville industrial market. accessibility regulations. The site is in close proxim- Most buildings in this market have smaller foot- ity to the existing Toyota plant. prints than buildings in Jetplex or Chase, and many • 1505 The Boardwalk, an 85,000 sf building built facilities in this market have been recently constructed in 1985, sold for $3,000,000. along the Highway 53 corridor, providing good access to North Alabama and Southern Tennessee. The ten- • A 32,674 sf facility located at 6515 University Drive ant mix in the area consists of companies in the auto- sold for $2.8 million to Hartlex Enterprises Inc. mobile industry, local and national service companies, Hartlex Antiques moved its operations to the facility. and defense companies. • American Tire Distributors (ATD) took occupancy of its new 100,000 sf distribution facility. Recent Developments: • Yulista broke ground on a 60,000 sf aviation hangar Major Area Tenants Include: and 20,000 sf support facility at the Madison County Toyota, Verizon Wireless, Ferguson, and DirecTV. Executive Airport in Meridianville. The facility will service both fixed and rotary-winged aircraft. Sierra Nevada also announced plans to build a 30,000 sf facility at the airport which will create 200 new aircraft jobs. • BPI purchased the 35,192 sf building it has leased since the property’s construction in 2004. The purchase price was $1.67 million or $47 psf. Crown Group was the seller.

AMERICAN TIRE DISTRIBUTORS ATD is the nation's largest tire distributor, serving 70,000 customers from over 115 distribution centers.

GRAHAM & COMPANY | 2017 MARKET SURVEY | HUNTSVILLE 3 [ 5.2 MILLION SF TOTAL ] OVERALL VACANCY 0% Chase Industrial Market SINGLE TENANT 0% MULTI-TENANT 0%

Chase Industrial Park remained at 100% occupancy Major Area Tenants Include: in 2016, marking the second year in a row the va- Technicolor, PPG Industries, Brown Precision, cancy rate has been 0%. Chase represents 22% of the Schwarze Industries, Kommerling USA, and CF Flag. entire Huntsville industrial market and was developed by the Madison County Commission. Chase Industrial Park is comprised almost exclu- sively of single tenant employers. Comprised of 1,700 acres in northeast Huntsville, only 50 acres remain available for new development. Products manu- factured in the park include medical instruments, DVDs, copper plastic products, and pharmaceuticals.

PPG PPG is a global supplier of paints, coatings, opti- cal products, specialty materials, and fiber glass.

4 GRAHAM & COMPANY | 2017 MARKET SURVEY | HUNTSVILLE [17.9 MILLION SF TOTAL] OVERALL VACANCY 16.63% SINGLE TENANT 7.87% Office Market Overview MULTI-TENANT 24.39%

HUNTSVILLE OFFICE MARKET OVERVIEW

OFFICE: Huntsville office market vacancy fell to but active in the CBD market with several mixed-use 16.63% in 2016, marking the first time rates have projects underway. declined since 2010. Huntsville vacancy is still well Rental rates increased nationally by an average of above the national vacancy rate of 12.90%. The na- 6%, the highest increase since 2007. Rental rates in tional average is at its lowest rate since 2009. Huntsville remained steady in Class A and B inventory The office market had 128,000 sf negative absorp- with annual increases averaging 2.5% to 3%. Rent tion in 2016, following 164,000 sf positive absorp- concessions are still being offered in the CRP market to tion registered in 2015. The office market nationally help backfill vacant space. posted absorption of more than 38 million sf, a sharp deceleration from the prior year’s 60+ million sf. Office Announcements of Note: Vacancies in Huntsville’s Cummings Research • Boeing announced plans to bring 400 new jobs to Park (CRP) remained high, especially in multi- Huntsville by the end of 2020 as part of a nationwide tenant buildings. Overall vacancy for CRP fell to effort to simplify its workforce and facilities. The new 14.54%, but multi-tenant vacancies are still in the Boeing buildings are expected to be built near its 25% range. The bulk of these vacancies remain in Jetplex Campus. older, Class C buildings located in CRP East. Sev- • HudsonAlpha Institute broke ground on a new eral of these buildings are being actively marketed 100,000 sf building. This is the fourth building on for sale, and the use for these properties may change the biotech campus in CRP West, and the Institute with new ownership. now employs more than 700 people. New construction for office buildings slowed in 2016 with just under 40 million sf completed. The • Aerojet Rocketdyne will be consolidating six national trend points to a decrease in suburban office business units into two divisions: Space and De- construction and increase in downtown markets. New fense. The Defense Business Unit Headquarters will construction in Huntsville was slow in the CRP market be located in CRP. The Defense Advanced Programs will relocate to the Huntsville area to be closer to its customer base. HUNTSVILLE OFFICE ABSORPTION 2016 OFFICE MARKET VACANCY RATE

OFFICE SINGLE MULTI- OVERALL MARKET TENANT TENANT

CUMMINGS 7.62% 25.4% 14.54% RESEARCH PARK

JETPLEX/ MADISON 8.46% 36.02% 31.04%

CENTRAL BUSINESS DISTRICT 13.07% 17.68% 17.22%

2016 VACANCY RATE OFFICE MARKET TOTAL SF VACANT SF 2012 2013 2014 2015 2016

SINGLE TENANT 8,429,634 SF 663,601 SF 4.81% 5.09% 10.79% 13.14% 7.87% HUNTSVILLE MULTI-TENANT 9,616,008 SF 2,320,803 SF 20.02% 25.64% 24.83% 25.03% 24.39% OFFICE ABSORPTION TOTAL OFFICE 17,945,642 SF 2,984,404 SF 12.55% 15.47% 18.02% 19.31% 16.63%

GRAHAM & COMPANY | 2017 MARKET SURVEY | HUNTSVILLE 5 [ 3.5 MILLION SF TOTAL ] OVERALL VACANCY 17.22% Central Business District (CBD) Office Market SINGLE TENANT 13.07% MULTI-TENANT 17.68%

The Huntsville downtown/Central Business District Recent Developments: (CBD) office market consists of approximately three • Huntsville Utilities approved a rate schedule and million sf and is dominated by the business services agreements to bring Google Fiber to the Huntsville sector including law firms, banking, accounting, and market. Google Fiber will use the utilities’ fiber optic real estate companies. City, county and government cable to stream internet and TV services. The project employees also make the CBD their home. is expected to begin roll-out in mid-2017. Vacancy in the CBD decreased slightly to 17.22% • Bryant Bank broke ground on a 32,000 sf, four- in 2016 from the previous year’s 17.46%. Several story office building at Twickenham Square. The mixed-use projects are under construction that will downtown office will be Bryant Bank’s main office in increase inventory of Class A office space. Vacancy Huntsville and should be completed in the summer in Class A product was low at 12.44%, so new space of 2017. should be absorbed quickly, as there is not a large amount of existing inventory. • Warren Averett, one of Birmingham’s largest CPA firms, announced plans to acquire Beason and Nalley. The Huntsville office will add 20 new- em ployees to the company. • 802 Shoney Drive, a 12,920 sf multi-tenant building previously owned by Avadian Credit Union, was sold to Jeff Benton Homes. Built in 2012, the property is located across the street from the Jeff Benton Homes office.

Major Area Tenants Include: Regions Bank, Bryant Bank, The City of Huntsville, BB&T, Lanier Ford, Bradley, and Huntsville Hospital.

BRYANT BANK Bryant Bank is an Alabama owned community bank, operating only in the state of Alabama.

6 GRAHAM & COMPANY | 2017 MARKET SURVEY | HUNTSVILLE [ 1.7 MILLION SF TOTAL ] OVERALL VACANCY 31.04% SINGLE TENANT 8.46% Jetplex | Madison Office Market MULTI-TENANT 36.02%

Vacancy for the Jetplex/Madison office market decreased in 2016 to 31.04%, representing a substantial drop from the 44.23% rate in 2015. The main driver for this decrease was razing more than 600,000 sf of the former Intergraph campus that will become part of the Town Madison development. 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. Both Crestwood and Huntsville Hospital now have a presence in Madison.

New Developments: • A Class A, 30,096 sf office building located at 8337 US Highway 72 was sold to Universal Health Realty Income Trust in March of 2016. The building was built in 2012 and the main tenant is Progress Bank. • Boeing leased 30,000 sf at 124 Jetplex Boulevard. The 60,000 sf office building is located near the Boeing headquarters facility in Jetplex Industrial Park.

Major Area Tenants Include: Intergraph, Boeing, Ability Plus, Huntsville Hospital, and Plat- inum Mortgage.

BOEING Boeing is the world's largest aerospace company and leading manufacturer of commercial jetliners and defense, space and security systems.

GRAHAM & COMPANY | 2017 MARKET SURVEY | HUNTSVILLE 7 [ 12.7 MILLION SF TOTAL ] OVERALL VACANCY 14.54% Cummings Research Park Office Market SINGLE TENANT 7.62% MULTI-TENANT 25.4%

Cummings Research Park (CRP) overall office cated on Redstone Arsenal. Redstone is home to the vacancy decreased slightly to 14.54% in 2016 while U.S. Army Aviation and Missile Command (AM- multi-tenant vacancy increased to 25.40%. COM), the Space and Missile Defense Command, Most vacancies in CRP are located in older, Class numerous Program Executive Offices (PEO), and C product. Many buildings in this category might major components of the Defense Intelligence Agen- find a different use in the near future as the CRP cy and the Missile Defense Agency. master plan is advanced. This new plan should al- low for zoning changes in certain areas within the park, reducing the amount of older product in the park, especially in CRP East, while lowering vacancy rates and increasing availability of mixed-use product benefiting CRP tenants. CRP is the largest office market in Huntsville with more than 12 million sf, representing more than 70% of the total Huntsville office market. Cummings Re- search Park is the second largest research park in the United States, encompassing 3,843 acres. Only 430 acres remain for future development. The park mix ranges from Fortune 500 companies to local entrepre- AEROJET ROCKETDYNE neurial start-ups to award-winning small businesses. Aerojet Rocketdyne is an aerospace and defense leader providing propulsion and energetics to Most companies in CRP act in a support role to customers around the world. meet various demands for military installations lo-

8 GRAHAM & COMPANY | 2017 MARKET SURVEY | HUNTSVILLE Cummings Research Park Office Market

Recent Developments: • The new 40,000 sf LogiCore building on Voyager Way was completed. The building offers multiple areas for collaborative work space, an event center, auditorium, and fitness center. LogiCore was founded in 2002 and employs more than 200 people. • HudsonAlpha continues to expand its campus with an announced 100,000 sf addition. The Hudson- Alpha Institute has had a dramatic positive influence in CRP, and according to a study by the University of Alabama in Huntsville, has had an economic impact MANTECH ManTech offers a suite of government and of more than $1.3 billion since its inception in 2006. commercial solutions to address security and • The Digium building located at 445 Jan Davis technology challenges. Drive was purchased by Select Income REIT in Sep- tember of 2016. Digium will remain as the single • Kord Technologies purchased a 33,581 sf building tenant in the facility. The 57,000 sf building was at 635 Discovery Drive. The building was formerly built in 2007. owned by Reaclo. Kord Technologies is a woman- owned small business headquartered in Huntsville, AL. • 500 Discovery Drive was purchased by Discovery Office Props, LLC in February of 2016 for $57.50 psf. The 20,000 sf building was built in 1991 and was formerly leased by Synapse Wireless.

Major Area Tenants Include: SAIC, Aegis Technologies, Adtran, Northrop Grum- man, Dynetics, Lockheed Martin, Camber Corpora-

KORD TECHNOLOGIES tion and numerous other high-tech companies. Kord Technologies focuses on providing engineering, information technology and support services to defense and civilian agencies.

GRAHAM & COMPANY | 2017 MARKET SURVEY | HUNTSVILLE 9 CUMMINGS RESEARCH PARK Center of Attention... HUNTSVILLE, ALABAMA CRP WEST CRP EAST 231

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HUNTSVILLE, ALABAMA Neighborhood Market 72

Neighborhood Market MAJOR RETAIL STORES RETAIL MAJOR

Neighborhood Market 431 One of Forbes Leading Cities for Business... Cities Leading One Forbes of

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231 Retail Market Overview [13.6 MILLION SF TOTAL] OVERALL VACANCY 12.01%

HUNTSVILLE RETAIL MARKET OVERVIEW

RETAIL: Vacancy in Huntsville’s largest submarket, Uni- Vacancy for the Huntsville retail market declined versity Drive, decreased to 11.78% in 2016, represent- dramatically to 9.10% in 2016 from the previous ing a substantial decrease from the prior year’s rate year’s rate of 12.01%. This decline was primarily due of 18.74%. The purchase and razing of the former to the demolition of Madison Square Mall and an Madison Square Mall had an immediate and posi- empty Walmart. tive impact on vacancy as the Mall had experienced New developments, especially mixed-use, have high vacancy for some years. University Place Shop- begun in several locations across the Huntsville ping Center is under new ownership. Many of the market. Town Madison is under construction along vacancies that existed prior have been back filled, I-565. It will bring new retail, hotel, office and apart- and the center is now thriving. ments to the south Madison area. The MidCity de- The North Huntsville submarket vacancy rate development is being constructed on the old Madison clined to 14.62%. Planet Fitness announced plans to Square Mall site and will include 150,000 sf of retail lease 26,000 sf in The Fountain, a 377,026 sf develop- and an amphitheater when complete. ment anchored by Home Depot and Books-A-Mil- On the national level, rental rates increased again lion. New development is still slow in this market so in 2016 and Huntsville is no exception. Many of the vacancy should remain stable. new, Class A retail developments have asking rates South Huntsville vacancy decreased to 8.02% in the mid to upper $20 psf range. and should continue to improve as the overpass Retailers, especially companies that have offered construction along South Parkway moves toward big box stores, are struggling with the effects of e- completion. Several small retail centers have been commerce. The footprint of retail stores should con- constructed in the area in the last 12 months, and tinue to shrink to lower the cost of doing business in leasing activity at those centers has been strong. the new e-commerce era. The Jones Valley and Downtown markets have The Madison/Hwy. 72 market has a vacancy rate several new projects underway that have been well of 6.88% and continues to expand west through received by the public. The 90,000 sf Merchants Walk Madison towards the County Line Road and Ath- development anchored by Whole Foods landed sev- ens, AL areas. Land prices and rental rates have in- eral new restaurants and retailers new to the area. creased in this market and should continue unless Two new planned developments include the 41,000 traffic becomes an issue. sf Merchants Square and the 53,000 sf Times Plaza.

2016 VACANCY RATE RETAIL MARKET TOTAL SF VACANT SF 2013 2014 2015 2016

UNIVERSITY WEST 4,087,149 SF 765,809 SF 16.57% 19.86% 18.74% 11.78%

HIGHWAY 72/MADISON 2,780,223 SF 170,546 SF 5.92% 7.32% 6.13% 6.88%

JONES VALLEY/HAMPTON COVE 2,092,677 SF 70,100 SF 2.80% 3.0% 3.55% 4.44%

SOUTH HUNTSVILLE 2,702,164 SF 270,677 SF 7.55% 10.70% 10.02% 8.02%

NORTH HUNTSVILLE/HARVEST 1,902,200 SF 351,778 SF 14.62% 19.01% 18.49% 14.62%

TOTAL RETAIL 13,564,413 SF 1,628,910 SF 10.27% 12.92% 12.01% 9.10%

14 GRAHAM & COMPANY | 2017 MARKET SURVEY | HUNTSVILLE Retail Market Overview

2016 Activity: • The 40,000 sfWalmart Neighborhood Center on Bailey Cove sold for $12.9 million to an out-of-town investor for a 5.30% cap rate. • The 81,963 sf Plaza Centre Shopping Center on Hughes Road sold for $4.75 million ($57.95 per sf) to an LLC from Birmingham. Kroger vacated the center in 2016 to move to its new location at Midtown Market Place.

• Publix Supermarkets 472 PROVIDENCE MAIN purchased the 64,837 sf Edgar’s Bakery opened its first Huntsville location Madison Center located on Madison Boulevard for at The Village of Providence. $9.1 million. Publix is the largest tenant in the center.

MADISON SQUARE MALL MIDCITY HUNTSVILLE Demolition of Madison Square Mall is well under- MidCity Huntsville, a 100 acre mixed use commu- way. The site will be used for the MidCity Hunts- nity, is a $350 million redevelopment at the former ville development. Madison Square Mall Site. MidCity Huntsville will offer specialty retail, high-tech office, residential units and a boutique hotel.

RETAIL OCCUPANCY BY TYPE

RETA IL OCCUPA NCY BY TYPE

GRAHAM & COMPANY | 2017 MARKET SURVEY | HUNTSVILLE 15 Retail Market Overview

Announcements of Note: • Academy Sports completed and opened a new • RCP Companies and Yedla Hotel Management 63,000 sf building at the intersection of Memorial announced plans for a new 150-unit boutique hotel Parkway and Drake Avenue. The site was formerly a to be built at CityCentre in downtown Huntsville. Wal-Mart. CityCentre will also feature a 12,000 sf artisanal food hall called The Public Market. • Publix will anchor the Shoppes at Redstone development that will be located at Zierdt Road and Mar- • TopGolf will build a $20 million facility at the tin Road. Over 50,000 sf will be available for retail MidCity development planned for the former Madi- tenants, as well as six outparcels. son Square Mall site.

TOTAL RETAIL SF BY MARKET TOTAL RETAIL SF BY TYPE

RETAIL VACANCY RATE BY TYPE

TYPE VACANCY RATE

NEIGHBORHOOD 11.68%

NEIGHBORHOOD/ANCHORED 8.64%

POWER CENTER 8.72%

ENCLOSED MALL 1.91%

LARGE BOX 9.23%

2016

16 GRAHAM & COMPANY | 2017 MARKET SURVEY | HUNTSVILLE Recent Graham Activities

SOLD SOLD

BIG SPRING SUMMIT 14487 HIGHWAY 411

9,234 SF – 100 Church Street, 4th Floor 2,668 SF – 14487 Highway 411 Huntsville, AL Odenville, AL Graham represented PNC Bank in the disposition Graham represented PNC Bank in the disposition of this 4th floor condo at Big Spring Summit in of this facility to The Utilities Board of the Town of downtown Huntsville. Odenville. Agent: Tyler Fanning Agent: Tyler Fanning

LEASED LEASED

4960 CORPORATE DRIVE 107 JETPLEX LANE

2,510 SF – 4960 Corporate Drive 12,200 SF – 107 Jetplex Lane Huntsville, AL Madison, AL Graham represented Butler America in its lease of Graham represented Midsouth Paving in its lease of space at Corporate Park Office Center. this industrial facility. Agent: Tyler Fanning Agent: Tyler Fanning

SOLD LEASED

802 SHONEY DRIVE 191 JESSE BENNETT DRIVE

12,920 SF – 802 Shoney Drive 18,500 SF – 191 Jesse Bennett Drive Huntsville, AL Madison, AL Graham represented the owner in the disposition Graham represented Pace Runner, Inc. in leasing of this multi-tenant office building. space at this industrial facility. Agents: Tyler Fanning & Walter Brown, SIOR Agent: Jeremy Pope, CCIM, SIOR

GRAHAM & COMPANY | 2017 MARKET SURVEY | HUNTSVILLE 17 Recent Graham Activities

LEASED LEASED

PROGRESS CENTER 10382001 RESEARCHNICHOLS DRIVE BOULEVARD

3,698 SF – 6767 Old Madison Pike 9,475 SF – 2001 Nichols Drive Huntsville, AL Huntsville, AL Graham represented All Native Systems in leasing Graham represented the landlord in leasing space space at Progress Center. to ASRI. Agent: Bart Smith, CCIM, SIOR Agents: Bart Smith, CCIM, SIOR & Tyler Fanning

LEASED LEASED

124 JETPLEX BOULEVARD 6703 ODYSSEY DRIVE

30,766 SF – 124 Jetplex Boulevard 5,002 SF – 6703 Odyssey Drive Huntsville, AL Huntsville, AL Graham represented the landlord in leasing space Graham represented Draper Labs in its lease of to Boeing. space at Park Place in Cummings Research Park. Agents: Bart Smith, CCIM, SIOR Agent: Bart Smith, CCIM, SIOR Jeremy Pope, CCIM, SIOR

LEASED LEASED

890 EXPLORER BOULEVARD 358 DAN TIBBS ROAD

40,141 SF – 890 Explorer Bouelvard 10,000 SF – 358 Dan Tibbs Road Huntsville, AL Huntsville, AL Graham represented Dynetics in its lease of space Graham represented Floors, Inc. in its lease of in Cummings Research Park. space in Spacegate Industrial Park. Agent: Bart Smith, CCIM, SIOR Agent: Bart Smith, CCIM, SIOR

18 GRAHAM & COMPANY | 2017 MARKET SURVEY | HUNTSVILLE Recent Graham Activities

LEASED LEASED

1000 JAMES RECORD ROAD 255 SHORT PIKE ROAD

104,825 SF – 1000 James Record Road 208,031 SF – 255 Short Pike Road Huntsville, AL Huntsville, AL Graham represented both landlord and tenant in Graham represented the owner in leasing this leasing this industrial space to Intercept Industries. industrial facility to Navistar. Agent: Jeremy Pope, CCIM, SIOR Agent: Jeremy Pope, CCIM, SIOR

LEASED SOLD

5828 RESEARCH PARK BOULEVARD 237 LARACY DRIVE

30,000 SF – 5828 Research Park Boulevard 275,000 SF – 237 Laracy Drive Huntsville, AL Huntsville, AL Graham represented The Mane Choice in leasing this Graham represented the owner in the disposition industrial facility. of the former Parfums de Coeur facility in Jetplex. Agent: Jeremy Pope, CCIM, SIOR Agent: Jeremy Pope, CCIM, SIOR

LEASED SOLD

PROGRESS CENTER 29850 JONES AVENUE

8,887 SF – 6767 Old Madison Pike, Bldg 7 45,100 SF – 29850 Jones Avenue Huntsville, AL Ardmore, AL Graham represented Kaman Industrial Technologies in Graham represented the owner in the disposition its lease of space at Progress Center. of this industrial property. Agent: Jeremy Pope, CCIM, SIOR Agent: Jeremy Pope, CCIM, SIOR

GRAHAM & COMPANY | 2017 MARKET SURVEY | HUNTSVILLE 19 For Sale or Lease

355 QUALITY CIRCLE HUNTSVILLE, AL AVAILABLE FOR LEASE: Up to 45,715 SF • LEED Certified flex space in Thornton Research Park • 22' – 25' Ceiling height • ESFR Sprinkler

Contacts: Jeremy Pope, CCIM, SIOR Tyler Fanning [email protected] [email protected] 355 QUALITY CIRCLE

1500 & 1525 PERIMETER PARKWAY HUNTSVILLE, AL AVAILABLE FOR LEASE: Up to 5,233 Contiguous SF • Class A multi-tenant office building in the Cummings Research Park area • Lake views with patio areas at the lake • Security and access control

Contact: Tyler Fanning [email protected] PERIMETER CORPORATE PARK

7500 SOUTH MEMORIAL PARKWAY HUNTSVILLE, AL AVAILABLE FOR LEASE: Up to 10,000 SF • Unique office/retail opportunity in South Huntsville • Center offers high visibility, convenient ingress/egress, and monument signage opportunities

Contacts: Bart Smith, CCIM, SIOR Tyler Fanning [email protected] [email protected] MAIN STREET SOUTH

BIBB GARRETT ROAD AT INTERSTATE 65 TANNER, AL AVAILABLE FOR SALE: 97 Acres SITE • Located in Limestone County, AL • Suitable for industrial development • Excellent interstate access

Contact: Tyler Fanning [email protected] I-65 & BIBB GARRETT ROAD

4100 MARKET STREET AT REDSTONE GATEWAY HUNTSVILLE, AL AVAILABLE FOR LEASE: Up to 36,000 SF • Pedestrian friendly, mixed use business environment • Situated at the primary access point of Redstone Arsenal with visibility from I-565

Contacts: Bart Smith, CCIM, SIOR Tyler Fanning [email protected] [email protected]

Jeremy Pope, CCIM, SIOR REDSTONE GATEWAY [email protected]

20 GRAHAM & COMPANY | 2017 MARKET SURVEY | HUNTSVILLE For Sale or Lease

PROGRESS CENTER 6767 OLD MADISON PIKE, HUNTSVILLE, AL AVAILABLE FOR LEASE: Up to 7,728 SF • Flexible floor plans • Fiber optics capability • Convenient access to major traffic arteries

Contact: Bart Smith, CCIM, SIOR [email protected] PROGRESS CENTER

2914 GREEN COVE ROAD HUNTSVILLE, AL AVAILABLE FOR SALE: 85,000 SF • Fully heated and air-conditioned • Situated on 7.73 acres • Excellent accessibility to South Memorial Parkway

Contact: Bart Smith, CCIM, SIOR [email protected] 2914 GREEN COVE ROAD

124 JETPLEX BOULEVARD HUNTSVILLE, AL AVAILABLE FOR LEASE: 29,234 SF • Office building located in Jetplex Industrial Park • SCIF space available

Contacts: Bart Smith, CCIM, SIOR Jeremy Pope, CCIM, SIOR [email protected] [email protected]

124 JETPLEX BOULEVARD

1638 THOMPSON ROAD HARTSELLE, AL AVAILABLE FOR LEASE: 59,000 SF • Excellent access to I-65 at Exit 325 • Fully heated, cooled, and fire sprinklered • Additional 90,000 SF building pad available

Contact: Bart Smith, CCIM, SIOR [email protected] 1638 THOMPSON ROAD

110 WYNN DRIVE HUNTSVILLE, AL AVAILABLE FOR LEASE: 215,485 SF • Located in Cummings Research Park East • Suitable for office, lab, and light manufacturing • Special use, high bay testing facility available

Contact: Bart Smith, CCIM, SIOR [email protected] 110 WYNN DRIVE

GRAHAM & COMPANY | 2017 MARKET SURVEY | HUNTSVILLE 21 For Sale or Lease

481 FIRE TOWER ROAD GRANT, AL AVAILABLE FOR SALE: 82,500 SF • 100% Conditioned facility situated on 20 acres • 21' – 27' Ceiling height • 3 Dock high doors; 2 Drive-in doors

Contact: Jeremy Pope, CCIM, SIOR [email protected] 481 FIRE TOWER ROAD

2995 WALL TRIANA HIGHWAY & 799 JAMES RECORD ROAD HUNTSVILLE, AL AVAILABLE FOR LEASE: Up to 60,000 SF • Located in Jetplex Industrial Park • Only 1.5 miles to I-565 • 19' Clear height

Contact: Jeremy Pope, CCIM, SIOR [email protected] JETPLEX CENTER

120 SIBLEY ROAD RUSSELLVILLE, AL AVAILABLE FOR SALE: 110,450 SF • Situated on 10.44 acres • Industrial facility in Russellville Industrial Park • 16' – 25' Clear ceiling height • Fiber optic cable in place

Contact: Jeremy Pope, CCIM, SIOR 120 SIBLEY ROAD [email protected]

1000 JAMES RECORD ROAD HUNTSVILLE, AL AVAILABLE FOR LEASE: 129,849 SF • Industrial facility in Jetplex Industrial Park • Located one mile from International Intermodal Center • Norfolk Southern rail spur

Contact: Jeremy Pope, CCIM, SIOR [email protected] PHYSICIANS’1000 JAMES PLAZARECORD ROAD

450 11TH STREET ARAB, AL AVAILABLE FOR SALE: 94,652 SF • Situated on 10 acres • 10 Dock high doors; 5 Grade level doors • 20' Clear ceiling height

Contact: Jeremy Pope, CCIM, SIOR [email protected] 450 11TH STREET

22 GRAHAM & COMPANY | 2017 MARKET SURVEY | HUNTSVILLE Graham Huntsville Group

BART SMITH, CCIM, SIOR JEREMY POPE, CCIM, SIOR MANAGING BROKER SENIOR VICE PRESIDENT [email protected] [email protected]

JOINED GRAHAM & COMPANY: 2002 JOINED GRAHAM & COMPANY: 2000

AFFILIATIONS/HONORS: AFFILIATIONS/HONORS: • Certified Commercial Investment • Certified Commercial Investment Member (CCIM) designation Member (CCIM) designation • Society of Industrial & Office • Society of Industrial & Office Realtors (SIOR) designation Realtors (SIOR) designation • North Alabama Commercial (NALCOM), Past President • Member NAIOP – AL Chapter • Alabama Commercial Real Estate Center (ACRE), • Huntsville/Madison County Convention & Visitors Bureau, Leadership Council Board Member

• Alabama CCIM Chapter, Board Member CLIENTS INCLUDE: • Huntsville Rotary Club, Strive Mentor • Tyco • Owens Corning • Intergraph • Huntsville Hospital • Salvation Army – Advisory Board • Kuehne & Nagel • Harris Corporation • Siemens • First Methodist Church – Leadership Team • Willbrook Solutions • Wolseley • Ferguson • Continental • International Truck & Engine • Synapse Wireless CLIENTS INCLUDE: • Sanmina-SCI • Northrop Grumman • Cisco • COPT ERIKA HARLESS • Stanley Corporation • Wells Fargo Securities • DirecTV REAL ESTATE ASSISTANT • ATK • MITRE • Dynetics • AEGON • Orbital Sciences [email protected] • Booz Allen Hamilton • MetLife • Rockwell Collins

TYLER FANNING VICE PRESIDENT [email protected]

JOINED GRAHAM & COMPANY: 2007

AFFILIATIONS/HONORS: • CCIM Candidate (Certified Commercial Investment Member) • Huntsville Rotaract Club, Member • Huntsville Committee of 100 Young Professionals Initiative, Member • Huntsville High School Wrestling Coach

CLIENTS INCLUDE: • MITRE • Prometric • PNC Bank • Aerospace Corporation • Stephen Gould Corporation • Wells Fargo Securities • Southern Research • DRS • LYBD Engineering

GRAHAM & COMPANY | 2017 MARKET SURVEY | HUNTSVILLE 23 Corporate Services

ABOUT GRAHAM & COMPANY Founded in 1978, Graham & Company is a full-service commercial real estate firm based in Birmingham. With offices in Birmingham and Huntsville, Alabama and Jacksonville, FL and the Gulf Coast, the company offers professional services including sales, leasing, property management (GCP), 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.

COMMUNITY INVOLVEMENT Part of making our community a better place to live and work is an important tenet of Graham & Company. Our brokers and agents are active with local organizations such as the Salvation Army, Habitat for Humanity, volunteer coaching, church leadership and land conservation organizations. These good causes reflect a diversity among our associates in the Huntsville office, and our collective commitment to making Huntsville a place we are proud to call home.

AFFILIATIONS NAIOP–Commercial Real Estate Development Association SIOR–Society of Industrial & Office Realtors IREM–Institute of Real Estate Management CCIM–Certified Commercial Investment Member ICSC–International Council of Shopping Centers BOMA–Building Owners and Managers Association LEED–Leadership in Energy and Environmental Design CRE–Counselors of Real Estate Appraisal Institute

INDIVIDUAL MEMBERSHIPS INDIVIDUAL MEMBERSHIPS

24 GRAHAM & COMPANY | 2017 MARKET SURVEY | HUNTSVILLE grahamcompany.com MEASURE US BY OUR ACTIONS

GRAHAM & COMPANY PERSONNEL - Huntsville, Alabama

CORPORATE OFFICE & INDUSTRIAL MANAGING BROKER Steve Graham, Chairman Tyler Fanning Bart Smith, CCIM, SIOR Mike Graham, President Jeremy Pope, CCIM, SIOR REAL ESTATE ASSISTANT Erika Harless

| BIRMINGHAM | HUNTSVILLE | JACKSONVILLE | GULF COAST

110 Office Park Drive 355 Quality Circle 550 Water Street 100 Richard Jackson Blvd. Suite 200 Suite E Suite 1225 Suite 115 Birmingham, AL 35223 Huntsville, AL 35806 Jacksonville, FL 32202 Panama City Beach, FL 32407

TEL 205.871.7100 TEL 256.382.9010 TEL 904.281.0003 TEL 850.563.1500 FAX 205.871.3331 FAX 256.382.9011 FAX 904.281.0849 FAX 850.563.1504

Cover: American Tire Distributors Warehouse Copyright © 2017 6240 Mastin Lake Road, Huntsville, AL 35810 Reproduction, in whole or part, of this report is prohibited. Aerial Photography by www.tenboair.com Information deemed reliable, but not guaranteed.

Special thanks to Hiroko Sedensky and the Huntsville/Madison County Chamber for providing the Cummings Research Park map and the Major Retail Stores map, pages 10-13. MEASURE US BY OUR ACTIONS

355 Quality Circle, Suite E Huntsville, AL 35806 TEL 256.382.9010

grahamcompany.com

BIRMINGHAM HUNTSVILLE JACKSONVILLE GULF COAST