Atlanta Office Market Shows Growth in 2016

Circle 75 office building near SunTrust Park
Office properties like Circle 75 are staying in demand in the Atlanta area.

Now that 2016 is coming to a close, we’re seeing the first reports come out with data on how the office property market in Atlanta performed throughout the third quarter of 2016. This market has been in an overall boom since before 2016 began, and that trend only continued as the year went on.

Though some submarkets are hotter than others, the entire metro Atlanta region has seen a rise in demand for office properties, and as availability began to drop over 2016, developers are working to keep up with demand. We’ve seen new developments occurring in downtown, midtown, and Old Fourth Ward, among other areas.

The uptick in demand for office properties was likely boosted by healthy job growth in metro Atlanta, which included a 2.3% increase in employment in office-using sectors. This included the entry of several major corporate players to the Atlanta market, many, like GE, opening up headquarters space in Atlanta for the first time. At SK Commercial Realty, we’ve also watched as some of our office tenants’ companies grew this year, requiring additional office space to expand. All of these factors have combined to make for healthy job growth and a healthy demand for the office property market.

2016 also saw a new asking rental rate record, with Class A rental rates driving the market. Along with the peak in rental rates, the metro area has seen an uptick in speculative construction of office space. Of the 3.1 million square feet of office space currently under construction, 50% is already pre-leased. We’ve seen this general trend at SK Commercial Realty, as well, as we’ve already been able to lease half of a medical office that is still currently under construction. The Atlanta market hasn’t seen this construction/demand record since the Buckhead submarket boom between 2007 and 2009.

With a market this strong and consistent, we’re likely to see an uptick in leasing as well as investing in the metro area as we move into 2017.

If you’d like to check out SK Commercial Realty’s current office properties, click here.

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