Occupancy declines continued in Buckhead this quarter with just over 30,000 square feet of negative absorption occurring.
Atlanta's Buckhead submarket was mostly affected by USI Insurance's relocation to Central Perimeter. The company vacated 65,125 square feet at Prominence in Buckhead.
With the string of consecutive negative quarters, the overall vacancy rate has been trending upwards in Atlanta's Buckhead neighborhood. The good news is the year-over-year difference is only 50 basis points (0.5%).
Still, vacancies, along with a 170% increase in sublease availabilities over the past two quarters, are affecting Buckhead office rents. Class A averages showed no change from Q2, while overall, the submarket saw a slight decline.
Buckhead's absorption activity is expected to be borderline negative yet again in the fourth quarter. There are not enough scheduled move-ins to cover the space coming on to the market via tenant vacancy.
- Buckhead sees just over 30,000 square feet of negative absorption in Q3 2020
- USI Insurance's move out of approximately 65,000 square feet was the most significant factor in this quarter's decline
- Buckhead's overall vacancy rate is trending upwards but year-over-year shows only a 50 basis point difference
- Buckhead started to show signs of rental rate declines in Q3 2020
- Absorption is projected to be borderline negative for the Buckhead submarket in Q4 2020