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Outlook for almost all sectors of commercial real estate in the Atlanta and North Georgia areas remains strong and positive:

• Atlanta Office Market: Following the negative start to 2017, Atlanta’s office absorption turned positive in the second quarter with just over 616,000 square feet of space absorbed. In spite of the positive absorption, Atlanta’s overall vacancy rate increased slightly quarter-over-quarter due to the delivery of new office product. The positive activity in the second quarter will likely carry over into the latter half of the year, leading to a sixth consecutive year of occupancy gains in Atlanta’s office market.

 

• Atlanta Industrial Market: Posting its second consecutive quarter, Atlanta maintained its top spot in the nation with the most space absorbed year-to-date (8 million sf.). For a second straight quarter, Atlanta saw its overall industrial vacancy rate decline, despite even more space coming onto the market. Industrial rents in Atlanta showed signs of peaking as the overall average remained close to the same level it has been in the past couple of quarters. Given mid-year occupancy gains, and taking into account forecasted absorption, Atlanta is well on its way to record annual industrial absorption.

 

• Atlanta Multifamily Market: Job growth, strengthened by numerous corporate relocations, has pushed rents to historic levels. With low unemployment and renters with more spending power, the demand for multifamily housing will continue to sustain pressure on market rents in the short-term.  Demand in Atlanta’s highly sought-after areas inside the perimeter continue to trend upward but competition for more affordable options poses a threat. Going forward, this trend will continue while demand in other submarkets south and outside the perimeter will remain less attractive square feet.

 

• Atlanta Retail Market: Atlanta’s retail market continues to power ahead but at a slower pace than previous three years. The 516,032 SF of absorption in the first half of the year is only 60% of the space absorbed this time last year. Regardless, vacancy still dropped 0.2% due to a limited amount of supply delivering. The upward tick in rent provides hope that the supply and demand dynamics have reached a suitable point for the nearly 3 million square feet of construction that is taking place. This is the most retail space under construction since 2007. Macroeconomic conditions continue to look strong in Atlanta with another 80,000 jobs expected to be added this year, consumer spending driving GDP, and an increasingly bullish housing market.

Sources: Atlanta Commercial Board of REALTORS®; Colliers International