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Is the Birmingham area's office space market headed for a glut?
Some signs point to yes, depending on who is asked. But the answer ultimately could depend on the economy in the short term, as corporate downsizing and fiscal conservatism have created excess space - some being offered for sublease - and prompted local companies to reconsider or abandon expansion plans.
One thing is certain: More. than 300,000 square feet of office space that has not been spoken for is coming on line during the next year or so downtown and in the suburbs.
Absorbing that new inventory and backfilling existing space, observers say, will be challenging at best.
It's the economy
Dean Nix, a vice president at Harbert Realty Services, points to the economic downturn as a major factor affecting the local office space market.
"My opinion is that with the little downturn in the economy and companies laying off employees, companies that may have been wanting to expand are pulling the reins in," Nix says. "If they don't absolutely have to move or expand, they're waiting."
For much of the 1990s, office space in the Birmingham area was tight, and landlords had the advantage. Most agree that it is quickly becoming a tenants market, with property managers and owners having to more aggressively and creatively market their space.
An abundance of space becomes a problem when the market isn't able to absorb it in a reasonable amount of...