According to a recent report from Transwestern, the Atlanta office market is showing signs of improvement. After several years of stagnation, companies are finally making real estate decisions and this has resulted in positive absorption for the first time in over two years.
While Atlanta typically has a higher vacancy rate compared to other cities even during strong market conditions, there was an increase in direct vacancy by 40 basis points or 25% due to the delivery of three vacant buildings totaling 869,524 square feet.
However, there is some good news as sublease inventory has decreased by 4.2% over the past two quarters thanks to several large transactions being completed. On top of that, construction activity remains low with only a small amount of space currently under development – hitting its lowest level in fourteen years due partly to concerns about leasing and high construction costs.
Overall, it seems that things are looking up for the Atlanta office market as companies become more confident about their real estate decisions and sublease inventory decreases while new construction remains limited.
