1st Quarter 2019 Retail Report

Retail Market Summary

The metro Atlanta retail market turned the corner in 2014 with significant gains each year through 2016. The market pulled back slightly in 2017 but still recorded a strong year while 2018 outperformed 2017 but slightly behind 2016’s performance. Q1 2019 was tracking in line with 2017-2018 numbers.  Overall the changing trends away from brick and mortar stores as a result of e-commerce continues to be a concern.  Nevertheless, metro Atlanta’s rapid growth continues to attract national and local retailers looking to expand as is evidence by the continued strong performance.

Below is a quick summary of the Q1 2019 Metro Atlanta Retail Market stats that lead to the conclusions above as compiled by Crossroads Appraisal Group from information obtained from CoStar.  If you would like a PDF version of the information below, it is available here for your convenience.

SUPPLY

At the end of Q1 2019, there was a total of 27,931 retail buildings in metro Atlanta housing about 369.5 million square feet. Supply as reflected in building count has been increasing rapidly since 2013 while growth in total square footage has started to slow since 2017 reflecting a move toward smaller buildings in new construction, in particular fast food and gas stations.

VACANCY TRENDS

Vacancy rates have been trending down since 2013, but leveled in Q1 2019.

ABSORPTION, DELIVERIES & UNDER CONSTRUCTION

Net absorption has outpaced deliveries and new construction every year since 2013.

TRANSACTION VOLUME

Sales activity in the market has generally trended up with 2016 recording the six year high.  2017 recorded a slight pullback with 2018 finishing the year slightly behind 2016 but ahead of 2017.  Q1 2019 annualized volume is tracking in line with 2018.

VALUATION HISTORY

Values trended up from 2013 to 2016 while cap rates were compressing. 2018 values were up but still below 2017 levels. Q1-2019 performance saw a slight pull back again on values back to 2017 levels but continued compression in cap rates.

RENT TRENDS

Rents were stagnant from 2012-2014 with the five year low in 2015, but have increased sharply since the beginning of 2016.

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