Why Homewood’s Commercial Rents Have Plenty of Room to Grow

4/14/26 By Jordan Weaver

As a broker in Birmingham, I consistently field direct inquiries from businesses looking to be in Homewood, particularly downtown Homewood. Homewood combines high household incomes, one of the most desirable school systems in the region, a strong sense of safety, and a highly accessible, centralized location within the Birmingham metro.  For many businesses, it checks every box, and demand consistently outpaces the limited availability of rentable space. While Homewood’s commercial rents are rising, they have not kept pace with rapidly appreciating property values, a dynamic that is quietly reshaping pricing expectations and decision-making for both landlords and tenants.

Three of the four main arteries into Birmingham (I-65, Hwy 31, and Hwy 280) pass directly through Homewood. Combined daily traffic counts from these three roadways total just shy of 245,000 cars passing through Homewood every day (ALDOT 2024), a significant number for a metro with 1.2 million people. Homewood is directly adjacent to downtown Birmingham, Mountain Brook, Vestavia, and Hoover, making it a natural meeting hub for the metro area. If I had a nickel for every time I’m planning a business lunch and someone says, “Why don’t we just meet in Homewood?”, I’d be rich!  

Like Mountain Brook and other suburban cities in Birmingham, Homewood is landlocked and appears uninterested in annexing additional land. This creates a fixed supply of real estate. Homewood also maintains a large percentage of its land use as residential, making the commercial building stock relatively small.

CoStar, arguably the leading provider of commercial real estate data, defines the two submarkets that make up Homewood as ‘Midtown’ and ‘Oxmoor’. Over the five years ending Q4 2025, CoStar reports retail asking rents in the Oxmoor submarket increasing an average of 3.26% annually, while asset prices increased an average of 4.9% annually. This data proves that although Homewood’s commercial rents are growing, rental rates have not kept pace with property values.

Throughout the 12-month span of October 2024 – October 2025, only 20 total retail or office properties, totaling 142,392 square feet, were sold in Homewood. In the same period, 372 total retail or office properties, totaling 5,900,000 square feet, were sold in Metro Birmingham (CoStar). Homewood was only 5.37% of the total retail and office market, demonstrating the limited supply.

Due to Homewood’s limited stock of buildings, it will only become more difficult and expensive to purchase a commercial building in Homewood. This is already proven by Homewood’s low vacancy rate (3.4% for the Oxmoor retail submarket, Q4 2025 per CoStar). I don’t foresee demand for space declining; I see quite the opposite. I believe more and more business owners will be confronted with the choice to look for buildings to buy outside of Homewood or sign a lease in Homewood. In the coming years, we will see Landlords raising their rental rate expectations to align with their property’s value, and tenants eventually accepting these higher rates to position themselves in the highly desirable Homewood market.

IronVest Partners is a full-service commercial real estate firm offering brokerage, property management, and investment services. Over the last 24 months, IronVest Partners has completed 18 transactions in Homewood, AL, and 130 transactions in Metro Birmingham.