2022 Office Space Report: Atlanta, GA
Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.
With an economy that’s constantly growing and evolving, the city of Atlanta is home to a large number of dynamic businesses. As a result, the demand for commercial real estate in this area is high.
There are also many new buildings being constructed to meet this demand.
Atlanta is becoming increasingly popular in this phase of the COVID-19 pandemic. Companies want to move to where it’s more affordable and where there are fewer restrictions in place.
In this Atlanta office space report, learn current trends and possible opportunities for CRE investors in the future.
Atlanta Office Space Highlights
The Atlanta office space report reflects the huge migrations and gains the city has experienced during the COVID-19 pandemic.
Some important stats to consider are:
- Atlanta is recognized as one of the hottest commercial real estate markets in the U.S.
- Wages in Atlanta are growing at a rate of 7.7%, compared to the 4.7% average.
- The office market in Atlanta is still weak due to a high vacancy rate.
Now that investors, residents, and businesses have benefited from moving to Atlanta, the city will continue to have the resources needed to continue positive growth.
The Pacing of Office Space Rents in Atlanta
The national office vacancy rate across the U.S. is 15.4%.
The current vacancy rates for offices in Atlanta are currently higher than this:
- Atlanta is a hot market with an impressive 4.37% YOY increase in asking rents for office space.
- The office vacancy rate in Atlanta is 17.16%.
- The average asking rent in Atlanta is $30.67 a square foot. However, the average cost of Class A office space is $32.32.
Overall, the vacancy rate is expected to decrease and the prices for office rents are expected to increase in Atlanta based on this Atlanta office space report.
Long-Term Changes in Atlanta Office Space Rent
As more companies choose to expand their operations into Atlanta, there will be an increase in demand for commercial real estate in the city.
The growth of companies, like Coca-Cola and Delta Air Lines, will drive increased demand for office space in downtown Atlanta.
In addition, high-end retailers are starting to open locations in Atlanta, further increasing the demand for office space.
Short-Term Changes in Atlanta Office Space Rent
It’s no secret that Atlanta is one of the hottest cities right now when it comes to commercial real estate.
It is one of the fastest-growing metro areas in the country. Moreover, the cost of living in Atlanta is relatively low compared to other major cities such as New York and San Francisco.
The area will continue to attract new businesses.
Office Space Sales in Atlanta
Atlanta is a growing and changing market. Some noteworthy sales and acquisitions of office buildings have taken place over the last year.
Notable Acquisitions So Far
In early 2022, the CP Group acquired Bank of America Plaza from Shorenstein Properties, LLC for an undisclosed amount.
The previous sale in 2016 was for $220 million, hinting at a higher price tag for this sale.
A week before this sale, CP Group completed the purchase of the Buckhead Centre.
Notable Sales So Far
In mid 2022, TerraCap Management sold the 1200 Building in Duluth, GA to an undisclosed seller for an undisclosed amount.
The building reached 100% capacity at the time of sale and saw $7 million in renovations and upgrades.
In June 2022, Sumitomo sold its financial center in Buckhead to Nightingale Properties for $182 million. The sale is a $78 million loss for Sumitomo.
Market Forecast for the Rest of 2022
As long as the economy continues to grow, rents are expected to continue rising in Atlanta.
At the time of this Atlanta office space report, it’s expected that more high-end retail space will be under construction and new office leases will be available.
There is no doubt that the office market in Atlanta will continue to grow.
The biggest question investors should be asking is how high rents can climb before they begin to slow down.
Based on the information in this Atlanta office space report, investors should expect to see an increase in rents and activity in the commercial real estate sector as long as there are no major changes.
General Investor Activity: Where is the most money flowing?
Atlanta is experiencing a boom, given the size of its economy and the fact that it is located near other major cities.
The country’s economic activity has been at an all-time high in recent years. This strong financial base makes it an attractive market for investors.
There is a growing need for retail and office space in Atlanta, as well as hotels.
Currently, there are many existing office buildings and retail centers being repurposed into mixed-use developments.
Takeaways for Office Space Investors
Atlanta is an attractive market for real estate investors. The demand for office space is growing due to the many new companies, residents, and tourists that will continue to be in the area.
As this Atlanta office space report suggests, the office market is expected to remain strong through 2022.
Office space investors should be prepared to do their own due diligence when it comes to establishing a long-term plan for the Atlanta office market.
It is important for investors to look at other factors that can affect the market before committing capital into this sector.
There will be a good supply of new buildings being constructed in order to meet the demand for commercial real estate.
Over the next decade, Atlanta is expected to continue growing at a rapid rate.
This population growth and surge in economic activity could have an impact on the commercial real estate market in Atlanta going forward.
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