Bayer to build high-end Southside offices - Birmingham Business Journal:

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Bayer will partner with New Orleans-based to developl the project. Bayer is also partnerinyg with the company on the recently announced Summit Fremaucin Slidell, La., a $900 milliojn mixed-use development. Bayer's Principal David Silverstein said the new building is one of severak office projects the company has planned for the area to serve the heightened demand in the market for class A Other projects, said Silverstein, include an additional 50,00p square feet of retail at the Birmingham Summit's fourty phase, with two floors of office spaces above - set to start constructionj soon - and possibly a new buildinbg for Bayer's offices at a yet-to-be-determine d site.
The long-talked-about renovation of the Pizitzs building downtown intoa mixed-use developmenyt could begin as soon as earl y 2009, he said. Silverstein said plans are stilpl being finalized and did not disclose an exact dolla r figure for the Arlington Avenue but he said atleast $20 milliomn will be spent to construct it. Both Silversteibn and Michael Siegel, executive vice presidenrt of co-developer Corporate Realty, agree timing is everythin in announcing the new building and gettintg the attention of tenants looking to move and upgradedtheir space. "We think the markety is extremely strong," said Siegel.
"We want to let peoples know they will have a qualith project on this site before they make a commitment elsewhere." Siegel said the building will not be builtf until some tenants are secure, but doesn't foresee that as a problenm as the company is already in active negotiations with "We are going to build the he said. Recent data indicatee market conditions are ripe for new speculative construction in theofficse sector, with occupancy levels at an all-time-high in the majorith of Birmingham's submarkets. According to year-end 2007 data compilexd by , the class A markegt in midtown was at 99percent occupancy, followedf closely by the U.S.
280/Southern markeg at nearly 98 percent. Downtown recently reached a historic 92 percent occupancy rate for class A spacer when signed on tomove it'e headquarters into the announced it would relocatde its Alabama headquarters in Park Place. Bayer has not yet disclosex rental rates for the new but EGS's report showed that average clasds A rental rates for fourth quarter 2007 were up to $20.255 per square foot in the midtown market, $21.78u in the 280/southern market and $20.9o0 for the central business district. "The markets are in the tightesy situation its been in a number of saidBill Pradat, executive vice president at EGS.
"It'as just a great situation to be in to bring new producrton board." Birmingham's Colonial Properties Trusty said it plans to come out of the grouned with two new class A office buildings this year as well - one at Colonia l TownPark Colonnade and one at Coloniall Brookwood Village, similar to the one it completed thers last year and fully leased before Also, of Birmingham purchased the on 280 for $43.65 million. The company plans to re-markeft the campus as an extensiohn of its class A Grandview Corporate Parkacross 280.
So with numerouse projects announced and talk of others in the pipelines forthis year, how much square footag of class A space can the Birmingham market take? Pradat said developers need to look at absorption of space and historic market trends. EGS data indicated nearly 921,000 square feet absorbed by tenants in 2007alons - another record, he said. Since many of the projectzs mentionedabove won't come onlinw until 2009 and 2010, tenants will have to live at least another year with tighter-than-usual market conditions.