February 09, 2018
ATLANTA – Atlanta’s medical office market tightened throughout 2017 as vacancy decreased from 10.1 percent in the third quarter to 9.7 percent at the close of the fourth quarter, its lowest level in more than a decade. According to Transwestern’s fourth-quarter 2017 Atlanta medical office market report, the decline in vacancy was due to very strong demand with annual absorption at 639,378 square feet, the market’s highest level since 2008, coupled with a low level of new deliveries amidst Atlanta’s growing economy.
“Consistent demand and limited development during the past several years have resulted in Atlanta’s tight medical office market,” said Keith Pierce, Transwestern Director of Research for the Southeast U.S. “We anticipate a continued healthy rise in rent growth across the market as vacancy steadily decreases during the next 24 months.”
As of year-end 2017, development is taking place in many of Atlanta’s submarkets with 700,532 square feet of medical office product under construction, more than 60 percent of which is leased. Fourth-quarter average asking rates were $23.35 per square foot, up 3 percent year over year.
Additional highlights from Transwestern’s fourth-quarter 2017 Atlanta medical office report include:
· Atlanta enjoyed a healthy economy in 2017 that continues to outperform the nation, with unemployment at 4.1 percent.
· Vacancy declined in nearly all of Atlanta’s submarkets, including North Fulton at 7.2 percent and Buckhead at 7.6 percent. The Midtown/Downtown submarket reported vacancy at a very low 1.0 percent.
· Approximately 190,783 square feet was absorbed in the fourth quarter. The strongest quarterly demand was in the most populous metro areas of North Fulton and the Northwest submarkets.
Download the full report at: https://tinyurl.com/transwestern-atl-4Q2017-med.
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