Office Market Summary
Year to date 2019 results for the Atlanta office market are mixed: cap rates are up, average sales price is down, vacancies are flat and new construction is significantly outpacing absorption; however, rental rates continue to improve. Overall, the metro Atlanta office market remained strong through the first three quarters of 2019 but is showing some signs of at least slowing.
Below is a quick summary of the Q3 2019 stats that lead to the conclusion 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 up 1.5 million square feet over 2018.
Redevelopment trend remains strong as razing of older buildings for new development continues.
Vacancy rates trending down from 2013 to 2016, but have since leveled off.
ABSORPTION, DELIVERIES & UNDER CONSTRUCTION
Red Flag – Under Construction is at six year high significantly outpacing Absorption.
Sales remain strong with 2019 on pace for 1,100 transactions.
Cap rates up significantly from 2018 which has resulted in a slight value pullback.
Despite slowing absorption, increased construction levels and vacancy rates leveling off, rental rates continue to grow approaching $26.00 per square foot.