ACBR Market Brief: Q2 2017 Office Market

The Atlanta Commercial Board of REALTORS® (ACBR), the largest commercial REALTOR® association in the country, released its Q2 2017 Office Brief on office market trend statistics for 30 Atlanta Office Sub Markets.

Q2 2017 Office Market Statistics

CBR Market Brief

"The Atlanta office market continues to show strong activity," said F. Keene Miller, 2017 ACBR Board President, and President of Brokerage for Ackerman & Co. "Office absorption returned to positive territory in the 2nd quarter of the year, although vacancy edged up slightly with some one million square feet of deliveries coming online. Regardless, the market remains in a relatively healthy balance."

LABOR: According to the Bureau of Labor Statistics, the unemployment rate decreased 0.3 percentage points from 4.8% in April 2016 to 4.5% in April 2017. The unemployment rate compares favorably to Georgia (5.0%) and higher than the US (4.1%). The Atlanta metropolitan statistical area nonfarm job creation totaled 87,200 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 37,000 jobs during the past year.

ABSORPTION: Absorption rebounded during the second quarter of 2017. Overall absorption totaled 441,161 sf during second quarter 2017 and 331,485 sf year-to-date. Major occupancies by Global Payments, State Street Corporation, Bennett Thrasher, Holder Construction, Equifax, Honeywell, Wellstar, Rheem Manufacturing and Fulton County Health Department brought absorption into positive territory through the first half of 2017. As the Class A vacancy rate continues to decrease, demand for space in Class B buildings is expected to increase. Currently, only nine existing 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: Due to speculative construction completions, the total vacancy rate has increased from 17.1% in 2Q 2016 to 17.5% at the close of second quarter 2017. Direct vacancy rates increased 0.3 percentage points from 16.2% to 16.5% during the same time period. Three Alliance, Riverwood 200 and 8000 Avalon completed construction totaling over 1.0 msf. The speculative completions added over 750,000 sf of vacant space. Vacancy will decrease once the tenants that have leased space occupy in the next six to twelve months. The three buildings added much needed available space to highly sought after submarkets.

RENT: Weighted average rent growth continued to improve during 2Q 2017 especially in Class A properties in Buckhead, Midtown and Central Perimeter. Weighted average asking rents in all classes rose 5.5% recording $23.67per square foot (psf) at the close of 2Q 2017 compared to 2Q 2016. Class A weighted average rents recorded $26.62 psf at the close of 2Q 2017. 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.

Thursday, July 6, 2017

About the Atlanta Commercial Board of REALTORS®

The Atlanta Commercial Board of REALTORS® (ACBR) is the voice of commercial real estate in Metro Atlanta and has been an instrumental factor in the growth of real estate in the state of Georgia for more than a century. As the largest Commercial REALTOR® Association in Georgia, ACBR serves as a central source of information for its members by focusing on real estate education, the promotion of professionalism in the industry and representing members with legislative initiatives to create positive change for the real estate community. Membership in ACBR is the hallmark of quality, professionalism and production.

About Xceligent

Xceligent, Inc. is the fastest growing provider of commercial real estate information in the country. Headquartered in Independence (Kansas City), Missouri, Xceligent is the preferred industry partner for proactively researched commercial real estate information and marketing. Over its 14 year history, Xceligent has developed and refined revolutionary research processes that allow the company to offer a superior value proposition to the brokerage, development, government, EDC, appraisal and lending communities.

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