Research & Forecast Report
Atlanta
Q1 2015 | Office
New Year Begins, Positive Results Continue in Atlanta
Market Indicators Relative to prior period
ATL Q1 2015
ATL Q2 2015*
-
-
VACANCY
Key Takeaways >> The overall occupancy level for Atlanta’s office market is at its highest point in six years. >> Leasing activity continues at a robust pace in Atlanta. Key transactions this quarter in the Central Perimeter and Buckhead submarkets have further tightened office availabilities here.
NET ABSORPTION CONSTRUCTION RENTAL RATE CAP RATES *Projected
>> The Cumberland-Galleria area of the Northwest Atlanta submarket has emerged as the frontrunner for Atlanta’s next office tower to break ground. >> Limited development activity will continue pushing some asking rents to their highest levels ever in Atlanta’s history.
Summary Statistics Atlanta Office Market
ATL Market
ATL Class A
ATL Class B
>> Like last year, 2015 is poised to be one of Atlanta’s strongest performing years for office.
Vacancy Rate
15.6%
14.8%
16.5%
Atlanta Office Market
Change From Q4 2014
-0.2%
-0.3%
-0.1%
Steady and consistent occupancy gains persist in Atlanta’s office market as just over 640,000 square feet of space was absorbed in the first quarter of the year. In somewhat of a twist, the submarkets seeing most of the positive activity this quarter were not the typical stalwarts of Central Perimeter and Buckhead. Instead, the bulk of the absorption occurred in Midtown, Northwest Atlanta and South Atlanta. Ponce City Market was the anchor to Midtown’s market-leading occupancy gain. Approximately 33% of Atlanta’s net absorption this quarter took place in the recently delivered office building. Notable moveins include MailChimp and Cardlytics. To date, the office portion of Ponce City is almost 100% leased. Elsewhere, Midtown benefitted from previously signed leases which are now taking occupancy. For Northwest Atlanta, the Cumberland-Galleria area of the submarket is beginning to see momentum shift in its favor following a tepid 2014.
Absorption
644
547
108
New Construction
200
200
-
Under Construction
1.7
1.7
-
$20.01
$23.98
$16.36
Change From Q4 2014
1.2%
1.4%
1.5%
Year-Over-Year Change
4.1%
6.3%
3.8%
(Thousands Square Feet) (Thousands Square Feet) (Millions Square Feet)
Asking Rents
Per Square Foot Per Year
Average Quoted