North Fulton had its worst quarter since statistics have been consistently tracked, losing almost 360,000 square feet of tenants in Q3. The submarket was plagued with large move-outs by General Motors, Comcast, and State Farm this quarter.
Because of the negative quarter, the submarket’s overall office vacancy rate jumped to 13%; its highest point in 2.5 years.
Both 1000 Avalon and 1 Edison Dr. broke ground in Q3, bringing the total office square feet under construction to 803,432 sq. ft.
Going against market fundamentals, the average rental rate in the submarket increased for a sixth consecutive quarter. The Class A average reached a new record high of $26.48/sf.
The down quarter in North Fulton was somewhat expected given the anticipated moves. The submarket should finish the year with positive absorption in Q4; however, it likely won’t be enough to bring the overall total into positive territory.