- Like the beginning of 2016, first quarter results show a slow start for Atlanta’s office, seeing occupancy decrease due to negative absorption activity.
- The overall vacancy rate showed no significant movement from the end of last year and is still slightly below the year-over-year amount. Overall, the office vacancy rate in Atlanta increased only 10 basis points from last quarter. The Class A market, however, increased by 40 basis points from the same time.
- There were no significant deliveries over the past three months. These are anticipated to come online next quarter. Construction activity increased in Q1 with the 430,000 square foot 725 Ponce breaking ground at the site of the former ‘Murder’ Kroger on the Beltline.
- With the first quarter now over, along with its scheduled vacancies, Atlanta will now begin to see a more positive outlook in the coming quarters as it relates to absorption of space.
Atlanta Office Market
Though not as significant as the recent collapse of the I-85 bridge, Atlanta’s office market experienced a similar tumble to start the year with Q1 absorption totaling -137,847 square feet. This is the largest quarterly occupancy loss for Atlanta office since the first quarter of 2011. Coca-Cola, which is now completely out of its space at 2500 Windy Ridge, was the main contributor to the negative absorption this quarter vacating a total of 322,612 square feet. Though substantial, this was anticipated as part of the company’s consolidation to its Downtown headquarters over the past couple of years. Other sizeable move-outs include Farmers Insurance vacating 138,961 square feet at Corporate Centre Two in North Fulton and State Farm vacating its space at North Terraces; although this was balanced out by the insurance company’s 146,250 square foot move-in at its new office tower in Dunwoody.