Year End 2018 Retail Report

The metro Atlanta retail market saw continued gains in 2018 experiencing new construction, declining vacancy rates and increasing rents. Below is a quick summary of the Year End 2018 Metro Atlanta Retail Market stats 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

Heading into 2019 there was a total of 27,735 retail buildings in metro Atlanta housing about 369.1 million square feet. Supply has been increasing rapidly since 2012.  2018 saw a smaller increase in square feet with a stronger increase in the growth rate of the number of buildings.

VACANCY TRENDS

Vacancy rates have been trending down since 2012 reachin a new 7 year low in 2018 at 4.8%.

ABSORPTION, DELIVERIES & UNDER CONSTRUCTION

Net absorption has outpaced deliveries and new construction every year since 2012 with that performance continuing in 2018.

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.

VALUATION HISTORY

Values trended up from 2013 to 2016 while cap rates were compressing. 2017 recorded a slight pull back in value corresponding to an increase in cap rates.  In 2018 the average sales price outpaced the record pace of 2016 with cap rates back down close to 2016 levels.

RENT TRENDS

Rents were stagnant from 2012-2014 with the five year low in 2015, but have increased sharply since the beginning of 2016 with 2018 topping $14.00 per square foot, a 7 year high.

CONCLUSION

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. However, the changing trends away from brick and mortar stores as a result of ecommerce 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 significant construction activity in 2018.

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