Rough ending to a rough year for Atlanta office market in 2020
- Atlanta’s office market finishes 2020 with a net occupancy loss totaling (250,968) SF.
- Vacancies in the works coupled with the pandemic’s impact contribute to 2 million square feet of negative absorption for the Atlanta office market.
- Central Perimeter is the only core office submarkets to not end the year with occupancy losses.
- Atlanta’s office vacancy increases to the highest levels in over six years, reaching 14.5% overall.
- Available sublease space is at its highest point since the Great Recession.
Atlanta Office Market Overview
Atlanta’s office market ended the year on a sour note experiencing its worst quarter of absorption since the Great Recession in 2009. The effects of shutting down the economy earlier in the year have made their way into the dynamics shaping local office conditions. Just under 2 million square feet of negative absorption occurred in the fourth quarter, wiping out the positive gains in Q1 and Q2, and pushing 2020 into the red with occupancy losses totaling (250,968) square feet.
While Q4 results negatively impacted Atlanta office for the year, one aspect not helping limit the effects of vacancies hitting the market was demand for space, or the lack thereof. Overall, leasing activity for office in 2020 was down over 50% compared to 2019.
Atlanta Real Estate Market Forecast
Unfortunately, back-to-back quarters of occupancy losses in Atlanta’s office market are just the beginning of what is to come in 2021. With only half of the leasing activity of the past few years taking place in 2020, future absorption gains will be limited as a result of this. Additionally, there are a handful of large, anticipated vacancies over the next twelve months which will impact the market.
However, economic leaders in the metro region report future business activity being elevated which bodes well for the office market’s future. So, although the city will have to deal with the turbulence of 2020 for a bit longer, the market should be on the road to recovery a lot sooner than most other metros across the nation.
