It’s no secret that Huntsville’s downtown is a thriving area for work, living, and leisure; recent years have shown promising growth in each of those capacities, continuing to add residential and visitor appeal to the immediate area and the city as a whole.

According to Rob Buddo, President and CEO of Downtown Huntsville, Inc., an organization focused on supporting downtown’s development, there has been a significant uptick in migration to downtown. He explained that single-family homes are under development but take far longer to complete than multi-family projects, which help accommodate current demand.

Huntsville’s Development Review shows that in 2022 alone, 497 residential unit building permits were granted in downtown. Downtown has approximately 8,000 functioning multifamily units as well as 1,500 additional multi-family units under construction or planned to be under construction within the next month, Buddo said. Once completed, those additional units will raise downtown’s multifamily capacity by roughly 19%. Buddo predicts that following the completion of those units, DHI will place greater focus on supporting residents with quality-of-life upgrades such as shortening the distance between crosswalks and updating bike lanes.

Downtown’s residential growth is also in keeping with trends throughout the city. The almost 4,000 Certificates of Occupancy granted throughout Huntsville in 2022 represent a 30% increase of those granted 2021. In fact, 2022, the most recent Development Review available, showed the highest number of Certificates of Occupancy since its record keeping began in 1983.

That said, Downtown still stands out in having the highest average single-family homes at approximately $960,000 compared to the citywide average of $380,000.

Buddo also emphasized the need to focus on expanding office space over the next five years. As it stands, downtown includes 4.2 million square feet of office space, which is in high demand. Downtown’s office spaces have a vacancy rate of only 2-5%, indicating a lot of room for growth.

Over the next ten years, Buddo says, downtown would need 300-500k additional square feet of office space to keep up with ever-growing demand.

“I feel confident that the market could absorb that, but obviously, economic conditions for underwriting office deals is, you know, really challenging right now. And that’s gonna probably be the biggest thing that we face as a market,” Buddo said.

Downtown’s hospitality sector has also shown significant strides over the past year, according to a CoStar report. Within the last 12 months, hotels in the area have had a 72.7% occupancy rate, a marked improvement on the area’s 10-year average of 65.11%. Over the last 12 months, the average room rate sits at $144 per night.

CoStar also reports the market sale price per room to be in the extreme positive. The current market sale price per room is $169K, compared to $160K last year and a 10-year average of $135K. Buddo noted that he is impressed by the growth in the hospitality market over the last ten years as well as how well the market conditions have supported that growth.

“Almost everything you see now … is all new. Ten years ago, there was not as much downtown as there is now,” Buddo said, speaking to downtown’s rapid growth, especially since 2017.

Buddo also noted the importance of collaboration and support between the central downtown area and nearby amenities like Stovehouse, Campus 805, and Lowe Mill. Promotion of events like musical performances, brewery trails, and art markets helps support downtown residents in giving them access to a diverse array of leisure activities.

Exposing downtown visitors to those same activities shows them a fuller extent of the area’s offerings, increasing cash flow, adding to the entire area’s daytime population, and responding to the live-work-play model, which according to Yardi Matrix data has quadrupled in popularity within the U.S. since 2012.