USA – ALABAMA Trends and Developments Contributed by: Adam J. Sigman, Crystal H. Walls, Nathan Stotser, Katie Sinclair and Courtney Dow, Dentons
The Office Space Comeback The office space market began as disjointed and non- linear in 2025, but those in the industry are seeing key markers of growth heading into 2026. While many in commercial real estate have shifted from this market due to its lagging growth over the past half decade, some are seeing an end to the cycle as leasing activ - ity reached a new post-COVID-19 pandemic high in the last quarter of the year. The volume of larger-scale transactions rose slightly as well, and the year ended with the seventh consecutive quarter of increased office sales volume. This can largely be attributed to the shift back to in-office work. Many major compa - nies across the financial services, technology, media and entertainment industries are pushing for employ - ees to return to the office. Whether due to the large leases sitting on company books, or to promote and foster stronger connections in work environments, back-to-office company policies have played a key role in lowering the vacant office space rates across the country. The trend towards revitalising office spaces also con - tinued throughout the year as companies strive to make workspaces more dynamic and interesting for employees. In Alabama, several exciting new plans were confirmed and commenced in 2025. Coca-Cola UNITED’s headquarters will be located in Birmingham, Alabama and are slated to open in 2027, housing the company’s corporate headquarters for the central and north Alabama division, sales and warehouse division, and customer solutions centre and service department. A leader in the pharmaceutical industry has also set plans to spend more than USD6 billion to build advanced manufacturing operations in Hunts - ville, Alabama, and in Mobile, Alabama ArcelorMittal is investing USD1.2 billion in a production plant devel - opment for specialty electronic steel used in electric vehicle (EV) motors. The New Norm of Industrial Spaces Industrial facilities tied to logistics, advanced manu - facturing, life sciences and healthcare continued to outperform other areas of commercial real estate in 2025. According to Wakefield’s MarketBeat report, the demand for industrial spaces rose across the USA during the second half of 2025, and by the fourth quarter the total absorption of 50 million square feet
complexes under construction at the end of the year. Many expect the use of AI in the property manage - ment industry to enhance the renter experience by providing on-demand administrative capabilities and improved functionality for paying rent, making main - tenance requests, and handling other tenant needs. The Housing Market US home prices only rose by 1.8% between the fourth quarter of 2024 and the fourth quarter of 2025 accord - ing to the US Federal Housing Finance Agency (FHFA) House Price Index, and active listings rose by 8% towards the end of the year, reflecting a market shift towards buyers and away from the seller-driven stale- mates that many faced in recent years. While median principal and interest payments were on the decline in the second half of 2025, the past five years have been significantly higher than historical averages, and many are hopeful that the steady shift back to a more balanced market will continue. Even with these challenges of home ownership, the rising trend of Americans moving from urban living to suburban residential locations continued in 2025, and the south was marked as one of the fastest growing suburban markets (based on the percentage of Ameri - cans moving during the year). The Alabama suburbs reflected this and continued to be a highly in-demand market. In Huntsville, Alabama, the residential growth pace of 2025 matched the demand of 2024, with nearly 5,000 new-build housing units introduced to the market over the course of the year. In response to this demand, significant strides have been made by the state legislature to protect buyers in the housing market. Alabama House Bill 230 was passed to extend buyer representation and protec - tion requirements and to strengthen consumer protec - tions under the Real Estate Consumers Agency and Disclosure Act. The Act added certain requirements, including that a brokerage agreement be executed prior to the submission of any offers and that all refer - ral arrangements between licensees be in writing. The Alabama Legislature is hopeful that the requirements under this Act will create a more transparent real estate market in the state and increase buyer protec - tion.
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