May 08, 2018
ATLANTA – Atlanta’s fast-paced growth is reflected in the metro’s office real estate market, which posted 646,959 square feet of absorption in first quarter 2018, the highest single-quarter office demand in two years, according to research by Transwestern. Due to healthy absorption, vacancy was mostly unchanged at 16.2 percent, up by only 10 basis points from the previous quarter, despite a few vacancies at newly delivered office product.
“Atlanta continues to attract relocating businesses and workers resulting in strengthening fundamentals throughout the market,” said Matt Spickard, Transwestern Senior Vice President. “Asking rents are on the rise essentially everywhere in the metro in both Class A and B office properties. While Central Perimeter boasted impressive absorption during first quarter 2018, demand remains strongest in Midtown and Buckhead and is heavily weighted toward Class A space.”
The tightening Atlanta market has caused overall asking rents to climb to an average of $25.65 per square foot in first quarter 2018, with the highest rents in Class A properties in Midtown ($36.73) and Buckhead ($34.37). Additionally, as a variety of investors for both trophy assets and value-add opportunities remain active in the area, the average sale price per square foot has steadily increased to $201 per square foot, an 11 percent gain over the previous 12-month period.
Atlanta currently has 1.5 million square feet of speculative office space under construction – not including 1.8 million square feet of build-to-suit projects – in Midtown, Downtown, North Fulton, and Northlake. The bulk of development is underway in Midtown, which posted an 8.6 percent vacancy rate, the lowest of all major Atlanta submarkets.
“Approximately 51 percent of speculative office space has already preleased and is expected to lease fully before completion,” said Keith Pierce, Transwestern’s Director of Research for the Southeast U.S.
Download Transwestern’s full first quarter 2018 office market report at: https://transwestern.com/market-reports
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