Rough start to the year for Atlanta's office market
- Atlanta office sees record negative absorption to start the year
- Overall office vacancy is the highest since 2013
- Average rental rates continue to show upwards movement
- Outlook remains challenged as steady increases in space demand will be key to recovery
Atlanta office market overview
On the heels of last quarter's 2 million square-foot occupancy loss, Atlanta's office market finds itself in a deep hole to start 2021, experiencing its worst quarterly absorption ever in its history in Q1. The net occupancy loss of 2.8 million square feet rivals the negative absorption witnessed in 2009 following the Great Recession.
Although hard to take any positives away from this, most of the vacancies added over the past quarter were already in the works. Tenant moves as a result of the pandemic were limited. Additionally, leasing activity has begun to pick back up following a slower year of demand.
Atlanta real estate market forecast
Though some adversity lingers, the outlook is upbeat. Overall leasing activity, while still passive, is beginning to pick up. The need for space has not subsided and this can be seen in large transactions by Global Payments, ServiceMaster and John Marshall Law School. Additionally, recent announcements by Airbnb, Adecco, Microsoft and Google prove strong demand still persists for Atlanta's office market.
As leasing levels begin to return to normal, this will benefit overall market performance in the years to come. in the near term, anticipated occupancies from some of Atlanta's more recent wins should factor into more positive results through the end of the year.
