The Atlanta Commercial Board of REALTORS® (ACBR), the largest commercial REALTOR® association in the country, released its Q4 2016 Office Brief on office market trend statistics for 30 Atlanta Office Sub Markets.
Q4 2016 Office Market Statistics
LABOR: According to the Bureau of Labor Statistics, the unemployment rate dropped 0.4 percentage points from 5.3% in October 2015 to 4.9% in October 2016. The Atlanta metropolitan statistical area job creation totaled 70,400 in the Atlanta-Sandy Springs-Roswell metropolitan statistical area over the past year. Office using jobs (information, professional and business services and financial activities) added 22,600 jobs during the past year.
ABSORPTION: The Atlanta office market recorded 389,684 sf of positive absorption during 4Q 2016 and approximately 1.3 million square feet (msf) year-to-date. Absorption was down from 2.5 msf recorded during 2015 due to a lack of large blocks of space available. Absorption is expected to increase during 2017. State Farm completed their building at Park Center and moved into half of the building with the rest of the occupancy occurring in first quarter 2017. Major occupiers of space included State Farm, Wellstar, Kaiser Permanente, Digital Realty and WageWorks. As the Class A vacancy rate continues to drop, demand for space in Class B buildings is expected to increase. Currently, only nine Class A buildings can accommodate a user larger than 100,000 sf. Demand for space is expected to continue as corporations continue to find Atlanta a good match for their Southeast destination.
VACANCY/RENTS: Weighted average rent growth continued to improve during 4Q 2016 especially in Class A properties in Buckhead, Midtown and Central Perimeter. Weighted average asking rents in all classes rose 5.3% recording $23.43 per square foot (psf) at the close of 4Q 2016 compared to 4Q 2015. Class A weighted average rents rose 4.4% year-over-year, recording $25.99 psf at the close of 4Q 2016. Class B rents rose 4.8% year-over-year, recording $20.17 psf at the close of 4Q 2016. We expect rents to continue increasing during 2017 with higher escalations in Class A buildings in submarkets with low vacancy and construction activity. Class B weighted average rents are expected to follow suit as options in Class A buildings drop.
Press Release : Infographic : Presentation Mode : Industrial Market Brief
The data in this report was compiled by data provided by Xceligent, a leading provider of verified commercial real estate information. For more information on details of this month's report, please contact the Board at 404.250.0051.