Atlanta Office Rents Continue Climb, Vacancy Holds Firm
This article originally appeared on Metro Atlanta CEO.
Cresa Atlanta has released the third quarter market report for Atlanta. Class A quoted rent in Atlanta this past quarter ended up at $30.65 a square foot, a 7-cent jump from Q2, which saw a much larger spike. Midtown saw an average class A rent of $38.99 per square foot, over $2.40 more than Buckhead. The Central Perimeter submarket saw 685,000+square feet in leasing activity. In North Fulton there was 602,000 square feet in leasing activity. The Cumberland market experienced one of the highest investment sales of the year, but the third quarter as a whole was slow with only 224,000 square feet in leasing activity. Ameris Bank’s 58,000 square foot lease at Securities Center softened an otherwise weak quarter in Buckhead.
Overall vacancy rates remained virtually the same from Q3 to Q2 2019, finishing at 11.4% and 11.5%, respectively. Thirty three Class A buildings, totaling 6.79 million square feet, are under construction across metro Atlanta, over half are in Midtown. Class A average rent marginally increased to $30.65 a square foot, perhaps anticipating a predicted economic slow-down.
Coworking giant WeWork has over 677,000 square feet in lease commitments in some of the most desirable buildings in Atlanta. Recent executive shake ups and a 2018 reported loss of $1.6 billion will have landlords and developers sweating going into the fourth quarter.
Midtown had the most leasing activity of all submarkets this quarter with over 788,000 square feet. A large chunk of that was Invesco’s 297,000 square foot lease at the proposed Midtown Union. The submarket leads the city with 3.6 million square feet under construction.