The Atlanta office market wrapped up 2022 with its fifth positive quarter in the past six with positive absorption of 212,812 square feet across all property classes in Q4 of 2022. The market’s vacancy rate was unchanged in Q4, holding steady at 20.3%.
Year to date, the market’s vacancy rate rose 0.6% despite positive absorption of over 1.3 million square feet, thanks to the delivery of 16 new buildings that total over 3.1 million square feet. This was the largest influx of new office space into the Atlanta market in a calendar year since 2002. Four more buildings broke ground in Q4, as Atlanta now has 21 buildings totaling 3.4 million square feet of space under construction.
Midtown was unsurprisingly the top performing submarket in 2022, with positive absorption of 844,500 square feet for 2022. Elsewhere, Central Perimeter was the top performer across Atlanta’s 7 suburban submarkets, seeing positive absorption of 344,623 square feet in 2022.
LEASING ACTIVITY
There were 1.8 million square feet worth of signed leases in Q4, highlighted by multiple large subleases in both urban and suburban submarkets. The highlight inking of Q4 was MARTA agreeing to take 130,000 at 575 Morosgo Dr at Lindbergh, the first tenant for Rubenstein Partners since the AT&T move-out in 2020. North Fulton, which has had over 5% of its existing inventory listed as available for sublease, saw over 115,000 square feet of subleases in Q4, and over 300,000 total square feet of leases signed.
The information contained herein has been obtained from the owner of the property or from a source deemed reliable. While Lincoln Property Company has no reason to doubt its accuracy, we do not guarantee it.
Metro Atlanta Office Q4 2022 Tenant Property Submarket Landlord SF Lease Type MARTA 575 Morosgo Dr Buckhead Rubenstein Partners 130,000 New Lease Sterling Seacrest Pritchard 2500 Cumberland Northwest Noro Management 63,600 Renewal SK Battery Stonebridge I North Fulton Starwood REIT 52,006 Sublease WheelsUp 2135 American Industrial Way Northlake Seven Oaks 35,5000 New Lease Best Claims Group 3155-3159 Royal Dr North Fulton Research Mgmt Corp 34,642 New Lease TOP LEASES Q3 2022 12% 14% 16% 18% 20% 22% ‐
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Q2 2020 Q4 2020 Q2 2021 Q4 2021 Q2 2022 Q4 2022 Absorption and Vacancy Rate Absorption Vacancy Rate 20.3% vacancy rate 3,438,149 sf under constr 212,812 net absorp Q4 $30.69 asking rent 2.9M ATL total nonfarm employment 2.7% ATL unemployment rate 3.5% US unemployment rate Source: CoStar; LPC Research Source: U.S. Bureau of Labor Statistics; LPC Research ABSORPTION AND VACANCY RATE 1,344,852 net absorp year-to-date Year-to-date, Atlanta has seen a 0.6% rise in vacancy rate, and positive absorption of over 1.3 million square feet. Solid Q4 Caps Off Strong 2022 for Atlanta Office Market
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
500,000 1,000,000 1,500,000
DOWNTOWN Class A 13,728,672 27.0% 0.3% 3,752,385 27.3% 26.8% (67,669) 12,809 585,350 994,871 $31.42
21,341,315 21.8% 0.2% 4,690,853 22.0% 21.8% (14,916) 87,400 651,668 994,871 $31.10
MIDTOWN
Class A 22,073,110 22.8% 1.3% 5,329,594 24.1% 24.3% 37,857 766,301 1,033,036 1,393,428 $42.57 Total 26,222,458 20.5% 1.2% 5,687,835 21.7% 21.8% 36,618 844,500 1,073,036 1,393,428 $41.72
Urban Total 69,454,609 21.2% 0.9% 15,300,336 22.0% 22.1% 109,433 857,383 2,112,767 2,576,050 $37.17
CENTRAL PERIMETER
Class A 19,499,815 24.0% 2.0% 5,068,499 26.0% 25.8% (33,852) 341,780 - 35,656 $31.90 Total 25,711,205 21.6% 1.8% 5,998, 369 23.3% 23.1% (49,605) 344,623 - 35,656 $30.89
NORTH FULTON
Class A 13,412,979 24.1% 2.2% 3,537,083 26.4% 26.5% 32,105 (136,951) 22,070 210,000 $28.11
Total 24,294,880 19.8% 2.7% 5,484,167 22.6% 22.8% 83,443 (191,593) 22,070 297,500 $26.10
NORTHEAST ATLANTA
Class A 6,620,699 20.7% 0.8% 1,422,246 21.5% 21.6% 6,662 53,087 - 35,580 $22.62 Total 18,957,841 15.0% 0.9% 3,003,385 15.8% 15.7% (20,347) 52,289 - 35,580 $21.25
NORTHWEST ATLANTA
Class A 14,461,864 18.6% 1.2% 2,854,890 19.7% 19.9% 23,643 168,223 - - $30.43 Total 29,121,071 16.8% 1.3% 5,263,971 18.1% 18.0% (13,614) 68,505 - 43,367 $27.51
NORTHLAKE Total 15,838,701 18.7% 0.1% 2,976,691 18.8% 19.7% 137,880 158,023 530,000 197,455 $23.74
Southeast
commercial real estate firm offering
comprehensive suite of value-added services
we
to provide
lenders
owners
has been obtained
property or from a source deemed reliable. While Lincoln Property Company has no reason to
accuracy, we
guarantee
Lincoln Property Company Atlanta tracks Class A, B, and C office buildings that are 10,000 square feet or greater, and excludes owner occupied, medical, and government buildings. METRO ATLANTA OFFICE MARKET Q4 2022 MARKET STATISTICS BY SUBMARKET Total Inventory SF Direct Vacancy Rate Sublease Vacancy Rate Total Vacant SF Vac Rate Q4 ‘22 Vac Rate Q3 ‘22 Net Absorp Q4 ‘22 Net Absorp YTD Deliveries YTD Under Constr Avg Rent (FSG)
Class A
23.0% 1.3% 4,387,922 24.3% 24.9%
$37.89
$36.72
Lincoln Property Company Southeast 3405 Piedmont Road, Suite 450 Atlanta, GA 30305 404 266 7600 About LPC SE: Lincoln Property
is a
a
for our clients. With our substantial local presence and history in the Southeast region,
are ideally situated
a superior service, which comes from knowing the goals and challenges faced by our clientele: tenants, investors,
and
of commercial real estate. Our people and our philosophy are the key ingredients for Lincoln’s solid track record of success. Michael Howell Sr. Vice President 404.266.7600 mhowell@lpc.com The information contained herein
from the owner of the
doubt its
do not
it.
BUCKHEAD
18,055,906
114,022 49,008 388,063 129,751
Total 21,890,836 21.4% 1.1% 4,921,648 22.5% 22.9% 87,731 (74,517) 388,063 187,751
Total
Suburban Total 126,451,053 18.0% 1.3% 24,489,031 19.4% 19.3% 103,379 487,469 1,009,221 862,099 $26.69 Total Market 195,905,662 19.1% 1.2% 39,789,367 20.3% 20.3% 212,812 1,344,852 3,121,988 3,438,149 $30.69 BY CLASS Class A 113,556,951 23.4% 1.3% 28,076,093 24.7% 24.8% 226,840 1,351,742 2,782,370 2,996,741 $33.40 Class B 67,024,855 14.2% 1.2% 10,320,674 15.4% 15.3% (35,524) 35,393 339,618 441,408 $23.16 Class C 15,323,856 9.0% 0.0% 1,392,600 9.1% 9.2% 21,496 (42,283) - - $21.46 Total Market 195,905,662 19.1% 1.2% 39,789,367 20.3% 20.3% 212,812 1,344,852 3,121,988 3,438,149 $30.69 Source: CoStar, LPC Research
SOUTH ATLANTA Total 10,019,899 8.4% 0.3% 871,438 8.7% 8.5% (19,488) 47,558 72,000 125,000 $22.15 WEST ATLANTA Total 2,507,456 35.5% 0.0% 819,010 35.5% 28.6% (14,890) 8,891 385,151 127,541 $31.02
