Before the onset of the novel coronavirus pandemic, Birmingham’s retail scene was evolving. Covid-19 has only served to accelerate those changes. Scores of restaurants and gyms have closed — a trend commercial real estate experts say will continue as the local economy suffers the fallout from Covid-19.
Experts say retail is here to stay, but the short-term implications for Birmingham are vast and may translate to bigger shifts in real estate investing. While the Magic City is not immune to the economic ravages of the virus, industry leaders already look forward to a time when a return to normalcy will make people forget the Covid-19 nightmare – even if the new normal looks a bit different than it did six months ago.
A lot of folks haven’t stopped. Their expansion plans pre-Covid-19 have not changed because of Covid-19.”
DAVID PLUMMER, VICE PRESIDENT OF LEASING & BROKERAGE, RETAIL SPECIALISTS
Birmingham’s retail scene was strong going into the pandemic. Publix continued its expansion with new stores throughout the area after opening its distribution center in McCalla. A portion of Lee Branch was acquired for a record $41 million. And the city continued to attract first-to-state concepts at developments like Stadium Trace Parkway and The Summit.
The whole system holding retail together has been in the crosshairs as tenants, landlords and lenders are working together on rent relief and loan deferrals. A majority of small businesses requested help, and about half a dozen large retail properties in metro Birmingham that use commercial mortgage-backed securities loans were put on “watch lists” to alert investors on the state of these properties.
But CRE professionals say they are pushing forward on deals as grocery-anchored shopping centers, for example, continue to expand with new locations planned for the metro area. The first few weeks of the pandemic were particularly busy for local brokers, but activity has since slowed down. They say this is due to the uncertainty caused by the pandemic and expect business owners to resume activity once they have implemented new plans and solutions.
“A lot of folks haven’t stopped,” said David Plummer of Retail Specialists. “Their expansion plans pre-Covid-19 have not changed because of Covid-19.”