USA – ALABAMA Law and Practice Contributed by: Adam J. Sigman, Crystal H. Walls, Nathan Stotser, Katie Sinclair and Courtney Bradshaw, Dentons
1. General 1.1 Main Sources of Law
developers faced the same high interest rates and construction and labour costs. In the multifamily world, despite a lack of pro - ject starts in 2024, rental demand remained high, providing optimism for new investments and construction despite high costs. In the housing market, as a result of high mortgage rates and low inventory, affordability remained an issue for motivated buyers. Meanwhile, while the office sector remains higher risk in certain locations, nearing the end of 2024, many businesses began to implement return-to-office mandates, moving away from full remote schedules and encour - aging more in-office or hybrid requirements for workers, a positive trend for those bullish on the office sector. Within the industrial context, total e-commerce sales increased again in 2024, and the demand for industrial logistics spaces increased to meet America’s ever-growing need for online delivery. Retailers (and other developers, including multi - family) are finding ways to convert old develop - ments such as indoor malls into adaptive reuse projects. A similar creative shift is occurring in a segment of traditional retail, where developers are targeting more experience-based entertain - ment activities in their projects. Like other industries, the influence of artificial intelligence (AI) in the real estate market grew in 2024. Nearly 75% of leading brokerage firms in the USA have adopted AI technologies in their daily practice to optimise efficiency. As AI usage expands at a rapid pace, the need for data cen - tres to support the increased AI needs also grew. Many developers have sought states with large rural land area, including Alabama, to accom - modate their data centre expansion efforts.
Knowledge of federal, state and local law, of the changes to those laws, and of local forms and customs is essential in successfully and efficiently practising real estate law. Alabama land records are handled on a county-by-county basis, and laws are interpreted accordingly. Many probate offices have implemented tech - nological improvements for better filing, record- keeping and access to recorded documents, though these developments can vary significant - ly between counties. Successful transactions often involve extensive negotiations. Closing commercial deals involves standard forms and requirements for both state law compliance and title insurance. All Sections referenced herein are Sections of the Code of Alabama (1975). 1.2 Main Market Trends and Deals Trends in 2024 In 2024, the intersection of several market factors in Alabama – such as interest rates, construction pricing, seller valuation/pricing stickiness (raw land and completed assets), institutional equity return requirements and the lack of permanent refinance credit facilities taking out construc - tion loans – caused a bottleneck of traffic on the commercial real estate highway. Many par - ticipants in the commercial real estate indus - try implemented “wait-and-see” approach as uncertainty surrounding interest rates remained. As a result, the commercial real estate industry saw a decline in the amount of new construction loans and a resulting decline in new construc - tion starts. Ultimately, the volume of real estate developments decreased from 2023 to 2024, as
1125 CHAMBERS.COM
Powered by FlippingBook