Atlanta’s office market rebounds from a slow start
- Absorption rebounds from negative territory with over +1 MSF.
- Overall office vacancy takes a step in the correct direction.
- Average rent continues to increase, but at a declining rate.
- Rising cap rates, interest rates, and inflation have slowed investment activity.
Atlanta office market overview
After a slow start to the year in which the Atlanta office market recorded -315,406 square feet of negative absorption in the first quarter, the market heated up in the second quarter as over one million square feet of space was absorbed. While Google’s 396,000 square foot occupancy at 1105 West Peachtree in Midtown led the way, the expansion of several additional firms like ISSNMT and Trenton Systems, added to the strong quarter. Not surprisingly, the overall vacancy rate decreased by 40 basis points during the second quarter. However, while asking lease rates have steadily been rising throughout the pandemic, the pace has begun to moderate.
Atlanta real estate market forecast
Coming off a slow start to the year, the Atlanta office market has rebounded. This rebound is expected to continue as leasing activity gains traction during the “flight to quality movement".