Tim Blair weighs in on a recent CRE feature in “The Birmingham News.”

Commercial real estate: Shopping centers and office buildings are starting to fill. (By Jean M. McLean, Special assignments write, The Birmingham News)

Some area residents have noticed some fill-in of the commercial real estate vacancies in their parts of town. Certain local industrial complexes, office buildings and shopping centers are beginning to welcome tenants again, with more restaurants, locally- owned stores, and even warehouses being leased in industrial parks.

Other observers haven’t seen much difference in the properties near their neighborhoods.

Both viewpoints can be combined to provide a pretty good reflection of 2012’s overall commercial real estate market in Birmingham, or at least what seems apparent by mid-July.

Three area industry leaders surveyed said the market is definitely better than at its lowest ebb during the recession’s worst months. But they have differing opinions on whether 2012 will be known as the real recovery year.

“I think we’re treading water. We’re doing deals, but they tend to be smaller,” said Maurice Humphries, president of Birmingham’s LAH Real Estate.

Still, business is much better than it has been in the past few years, said Terry Ponder of Ponder Properties Commercial Real Estate.

Ponder’s firm specializes in small strip malls and offices, where he said there seems to be a progres-sive absorption of Birmingham-area spaces. He says business is so good in certain areas of town, where residential sales have also picked up, that vacancies are being absorbed.

“I think by the end of the year we’re going to start having inventory problems in certain areas.”

Tim Blair, a principal with Shannon-Waltchack, a Birmingham-based southeastern commercial real estate firm, said he has asked himself lately if it’s okay to be optimistic again, since consumers seem to be expressing some confidence in the economy.

“The truth is, where there are problems, there are opportunities. If you fundamentally believe in real estate, now is the time to seriously consider purchasing,” said this officer with the Birmingham Commercial Realtor Council.

Blair, whose firm serves as “active buyers” of property for both clients and its own portfolio, said the downturn has created the best opportunity for buying investment commercial properties since the early 1960s.

One reason Birmingham’s metro area has good buys is that it never went through the overbuilding cycle of other cities, such as Nashville and Atlanta, Blair said.

“That’s not to say we didn’t take a hit. But we weren’t devastated.”

Still, the biggest demand is for properties in areas that have always been popular, said Humphries.

The basic principle of “location” being real estate’s all-important value determinant “has never been truer. Those properties that are well located are selling at premium prices. And then we have properties in less desirable locations, and those properties – when they sell – are selling at a percentage of their construction costs.”

Humphries underscores Blair’s observation about 2012’s residential rebound. He said the residential side of LAH “is doing much better numbers than we’ve done in five years.” It’s just a matter of time, he said, that builders will again building houses again and commercial development will follow.

The area’s biggest commercial weakness is new development, said Ponder. He said the recession isn’t to blame for all of the empty storefronts, citing U.S. Highway 280 East vacancies long before the recession hit.

Within a four-month period before September 11, 2001, more than two million square feet of retail opened in the Greystone-Lee Branch area, Ponder said. Owners have struggled since to fill that over sup- ply.

The office market is tightening, said Blair. He cited Birmingham’s health care sector as the resource that helped to keep more office spaces filled than in other cities, and called multifamily housing another bright spot.

Ponder still sees some weaknesses in the office sector, especially in large office buildings.

Areas of future development may hinge on gas prices, said Blair. He also named the European debt crisis as another unpredictable factor as to whether money will be available for local lending.

Blair believes gas prices could spur infill in already established areas, while communities like Trussville, “which is clearly a hot spot,” will continue to thrive.

None of those interviewed thought the upcoming election would have a significant impact on area development.

“Typically, at least to some degree, every time there’s a change in Washington there’s little bit of uncertainty, but it’s never as bad as they think,” said Ponder of national politics on local development. “They get over it.”

Humphries, who has worked in real estate for 37 years, said the ebb and flow of commercial and residential real estate sales has happened before, and will happen again.

“This engine that’s the U.S. economy is the strongest engine in the history of the world. That engine has been idle for four years. I believe in this engine. It is coming back. We just suffered a huge downturn, the biggest in a lifetime. We are recovering, we will return, and it will be just fine.”

by Suzanne Echols