LEASING MOMENTUM ACCELERATES IN Q1
Following a strong close to 2024, retail leasing activity in Huntsville metro continued to gain traction in Q1 2025, with a 13% increase in leasing. This uptick reflects sustained retailer confidence, particularly among expanding regional and national brands targeting high-growth trade areas.
Despite the increased leasing transaction volume, the market’s vacancy rate remains at a tight 3%, underscoring how strong tenant demand is being met with limited available space. It’s worth noting that while leasing volume increased in Q1, the vacancy rate remained unchanged at 3%, reflecting a balanced market dynamic. Much of the activity was driven by tenants backfilling second-generation space, while new vacancies emerged from lease expirations or newly delivered product. This steady turnover highlights a healthy and active retail environment, where strong demand is quickly absorbing available space, keeping overall vacancy low—even as the market remains in motion.
BIG BOX USERS COMPETE FOR OFF MARKET OPPORTUNITIES
Large-format retail space remains in especially high demand across the Huntsville metro. With availability still at historic lows and new construction primarily focused on smaller shop space, backfill opportunities in big box footprints are becoming increasingly rare. Closures from retailers such as Office Depot, Joann’s, Party City, PopShelf, and Conn’s have created long-awaited openings, offering a rare chance for expanding users to secure high-visibility, second-generation space.
However, in today’s hyper-competitive environment, most of these boxes are leased off-market, prompting a fierce race among tenants and brokers. Huntsville’s strong consumer base, high household incomes, and ongoing population growth continue to attract interest from fitness users, discount retailers, entertainment concepts, and specialty grocers looking for larger footprints.
TRANSACTION VOLUME IN HUNTSVILLE HOLDS FIRM AS FUNDAMENTALS OUTPERFORM
Retail transaction volume in Huntsville totaled $185 million over the past 12 months, aligning with the market’s historical average despite a national slowdown in retail investment activity. This consistency highlights the strength of Huntsville’s underlying market fundamentals. While interest rates have cooled deal flow in many metros, investors continue to target Huntsville for its long-term upside and stability.
While Huntsville continues to offer strong market fundamentals, average annual retail cap rates remain roughly 30 basis points above the national average. However, this gap is narrowing, with cap rates trending downward and aligning more closely with national benchmarks over the past six months.
AREAS TO WATCH: SOUTH & NORTH HUNTSVILLE
South Huntsville continues to gain momentum as a prime area for neighborhood-serving retail, bolstered by strong residential stability and targeted reinvestment. Recent public and private improvements, including new parks, road upgrades, and redevelopment initiatives—are drawing increased interest from retailers and developers. With limited availability and a loyal, established customer base, South Huntsville is positioned for steady, quality-driven growth.
Meanwhile, North Huntsville is experiencing a resurgence, fueled by new housing developments, industrial expansion, and improved connectivity to the broader metro area. The ongoing development of the Northern Bypass near Bob Wade Lane and the Parkway is improving access and making the area increasingly attractive. Retailers are beginning to take notice of the area’s untapped potential, especially as population growth pushes outward toward Meridianville and Hazel Green and demand rises for everyday goods and services. A major signal of confidence in the submarket is Food City ‘ s recent announcement of a new location on Bob Wade Lane, which is expected to serve as a key retail anchor and further catalyze development in the surrounding area.
ABOUT THE AUTHOR
Anusha Alapati Davis | Vice President of Retail
Anusha Alapati Davis is Vice President of Retail at Crunkleton Commercial Real Estate Group, specializing in retail leasing with a focus on adaptive-reuse, mixed-use, and high-end food and beverage concepts. A Huntsville native with over 9 years in the industry, she has played a key role in major projects like Twickenham Square, Stovehouse, and Lincoln Mill. Anusha works with local, regional, and national brands, helping create curated tenant mixes backed by strategic merchandising. She represents both landlords and tenants, and her network and market insight drive strong results. Anusha is a member of the 2022–2024 ICSC Next Generation Leadership Network and serves as ICSC NextGen Chair for the Gulf-South region.
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