The Alabama Commercial Real Estate Index™ (AL CREI™) is a quarterly survey of commercial brokers, developers, property managers, investors/owners, lenders, and other industry professionals to measure market expectations for the upcoming quarter. An index value of 50 indicates a neutral outlook. Scores below 50 indicate contractionary outlook while scores above 50 indicate an expansionary outlook.

In the Alabama Center for Real Estate’s survey, responses from the Q1 2025 CREI™ registered an index of 60.3, the highest score since the survey began in Q3 2023. This means commercial real estate professionals across the state expressed strong confidence that the statewide CRE market will expand during the first quarter. The Q1 index is 2.9 points above the Q4 CREI™, indicating a continuation of last quarter’s expansionary forecast, but with a higher level of confidence.

Two of the four components of the CREI™ increased from Q4 2024, with the Alabama market outlook having the sharpest increase, rising 9.8 points from the prior quarter. Construction costs were the only component of the index with a score below 50 (41.8) and decreased 0.8 points from the prior quarter, meaning that construction costs are expected to rise in Q1 2025. Interest rates are expected to improve (decrease) with very strong confidence during the upcoming quarter, but the score decreased 6.3 points from the Q4 2024 survey. The US market outlook is also expected to improve, rising 9.2 points from Q4 2024.