- Stronger occupancy gains in the fourth quarter were unable to lift Atlanta’s net office absorption over 1 million square feet in 2017. This will be the first time in six years annual absorption has not reached this mark.
- Overall office vacancy is up year-over-year mostly due to newly delivered space coming online. This affected the Class A market mainly. Class B vacancy declined 30 basis points (0.3%) from last year.
- Office construction activity continues to remain in check which has helped keep vacancy levels manageable. That being said, 2017 deliveries totaled over 2.1 million square feet; the highest annual amount of office space added since 2009.
- The absence of overzealous development has produced steady rental rate increases throughout the year. Atlanta’s office rents are up 6.1% from last year, with Class A and Class B rents increasing 5.1% and 4.4% respectively.
Atlanta Office Market
Atlanta’s office market finished the year on a strong note absorbing over 600,000 square feet in Q4; the highest amount of any quarter in 2017. For the year as a whole, however, the net amount of space absorbed was below 1 million square feet for the first time in six years. Additionally, 2017 marked the second consecutive year absorption levels dropped. The main factors contributing to this year’s dip were sizeable contractions, consolidations, and relocations. The largest of these took place in the first quarter. Coca-Cola’s scheduled move out of 323,000 square feet at 2500 Windy Ridge was the biggest vacancy to come onto the market this year, followed by State Farm relocating its Central Perimeter offices from North Terraces to its new office tower in the submarket.