The Atlanta Commercial Board of REALTORS Releases Q2 2016 Office Market Statistics
Monday, July 18th, 2016
The Atlanta Commercial Board of REALTORS, the largest commercial REALTOR association in the country, released its Q2 2016 Office Brief on office market trend statistics for 30 Atlanta Office Sub Markets. Office Brief, is compiled by data from Xceligent, a leading provider of verified commercial real estate information.
LABOR: According to the Bureau of Labor Statistics, the unemployment rate dropped 1.2 percentage points from 5.8% in May 2015 to 4.6% in May 2016. The Atlanta metropolitan statistical area job creation totaled 76,600 in the Atlanta-Sandy Springs-Roswell metropolitan statistical area over the past year. Office using jobs (information, professional and business services and financial activities) added 16,400 jobs during the past year.
ABSORPTION: The Atlanta office market recorded 538,830 SF of positive absorption during the second quarter of 2016 and 737,272 sf year-to-date. Major occupiers of space included Lincoln Financial Group, Fulton County Board of Assessors, Centers for Disease Control, Century Communities, Sage Software and Centene/ Peach State Health Plan. Several large tenants including Racetrac, Wellpoint and State Farm are expected to occupy over 100,000 sf each during third or fourth quarter 2016. Demand for space is expected to continue as corporations continue to find Atlanta a good match for their Southeast destination.
VACANCY: Due to an ongoing increase in demand for space, the total vacancy rate has dropped from 18.6% in Q2 2015 to 17.2% at the close of second quarter 2016. Direct vacancy rates dropped 1.5 percentage points from 17.9% to 16.4% during the same time period.
RENT: Rent growth continued to improve during second quarter 2016 especially in class A product in Buckhead, Midtown and Central Perimeter. Asking rents in all classes rose 7.6% recording $22.84 per square foot (psf) at the close of second quarter 2016 compared to second quarter 2015. Class A rents rose 7.3% over the past year, recording $25.60 psf at the close of second quarter 2016. We expect rents to continue increasing during 2016 with higher escalations in class A product in submarkets with low vacancy and construction activity.
TOP LEASE TRANSACTIONS: Major occupiers of space included Atlantic Trust, Rubbermaid, Kaiser Permanente, Kabbage, CHEP USA, Emory University, HD Supply and Wellstar. Demand for space is expected to continue as corporations continue to find Atlanta a good match for their Southeast destination.
ACBR President-Elect, F. Keene Miller: "The Atlanta market continues to see strong growth and activity across all product lines and markets. Widespread steady economic and job growth is fueling strong absorption and market demand. This coupled with measured new development has created positive rental growth and a balanced healthy commercial real estate market."