USA – ALABAMA Trends and Developments Contributed by: Adam J. Sigman, Crystal H. Walls, Nathan Stotser, Katie Sinclair and Courtney Bradshaw, Dentons
District of Birmingham, and in November, The J.M. Smucker Company held a grand opening for its new USD1.1 billion plant 19 miles from Birmingham. Suburbs and Office Space The US suburbs continue to hold a large per - centage of total office space inventory and occupancy. Though vacancy has historically been higher in the suburbs, the gap between the central business district (CBD) and suburbs shrunk to a mere 35 basis points just prior to the pandemic. Annual growth rates for the suburbs have held steadier than the rates for the CBD over the past few years. The Birmingham office market ended Q4 of 2024 with an improved overall negative absorption from the previous year according to Cushman & Wakefield’s MarketBeat report, and vacan - cies are holding steady at the end of the year at around 20%. Considering these factors, own - ers are continuing to raise rents but at a slower pace. Commercial leasing remained steady, and multiple multi-tenant office redevelopments are ongoing in the CBD and Midtown supermarkets. Guidance for Businesses and Employers From a Real Estate Perspective In general, all the major asset classes are expe - riencing and undergoing evolution in design and use. Efficient, higher quality and often smaller rentable square-foot office spaces are in demand to help attract tenants and keep finish-out costs affordable in a high construction cost environ - ment. Multifamily projects are transforming from simple complexes to luxury-oriented locations with a focus on extensive amenities, and retail continues to evolve with an increased focus on experiences tied with food and other activities, in addition to shopping.
With office spaces open and generally fully func - tional, building owners and managers should stay up to date on the newest regulations to avoid potential liabilities. Specifically, the CDC has directed building owners to review the guid - ance from the Building Owners and Managers Association (BOMA), which assembled a task group from across North America to develop best practices for owners and managers. BOMA recommends that owners meet with their risk managers and insurance brokers to review policies and coverage, and to assess new and ongoing liability risks. Owners of commercial real estate in all asset classes are and should continue to be laser- focused on costs of operations, leaning on prop - erty management to be efficient and creative, and to monitor debt markets for the right financ - ing opportunities (to manage cost of credit). The Corporate Transparency Act The Corporate Transparency Act (CTA) became effective 1 January 2024, requiring entities to report information, including specific ben - eficial ownership information, to FinCEN (the US Department of Treasury’s Financial Crimes Enforcement Network). However, the CTA faced many legal challenges over the course of the year, with the Fifth Circuit reinstating a nationwide pre - liminary injunction enjoining enforcement of the CTA and its Reporting Rule. Business owners and those forming businesses should stay up to date as this development unfolds. A lot of time and energy was directed towards compliance; however, in March 2025, the Treasury Depart - ment announced that it would limit the scope of the rule to foreign reporting companies only and not enforce any fines or penalties against US citizens, domestic reporting companies or their beneficial owners.
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