Atlanta Office Space

Atlanta’s Vacancy Increases to 16.8%

Net Absorption Negative (535,384) SF in the Quarter

The Atlanta Office market ended the fourth quarter 2009 with a vacancy rate of 16.8%. The vacancy rate was up over the previous quarter, with net absorption totaling negative (535,384) square feet in the fourth quarter. Vacant sublease space decreased in the quarter, ending the quarter at 3,640,000 square feet. Rental rates ended the fourth quarter at $19.14, a decrease over the previous quarter. A total of three buildings delivered to the market in the quarter totaling 95,076 square feet, with 1,732,432 square feet still under construction at the end of the quarter.

Absorption
Net absorption for the overall Atlanta office market was negative (535,384) square feet in the fourth quarter 2009. That compares to negative (523,538) square feet in the third quarter 2009, negative (1,332,256) square feet in the second quarter 2009, and negative (501,806) square feet in the first quarter 2009. Tenants moving out of large blocks of space in 2009 include: Bryan Cave Powell Goldstein LLP moving out of 151,048 square feet at One Atlantic Center; Arris moving out of 144,647 square feet at Johns Creek - Bldg 11450; and AT&T moving out of 138,000 square feet at American Cancer Society Center. Tenants moving into large blocks of space in 2009 include: First Data Corporation moving into 181,831 square feet at Glenridge Highlands II; Verizon Communications, Inc. moving into 141,804 square feet at Stonebridge II; and Deloitte & Touche, LLP. moving into 123,964 square feet at One Ninety One Peachtree Tower. The Class-A office market recorded net absorption of negative (422,147) square feet in the fourth quarter 2009, compared to negative (20,363) square feet in the third quarter 2009, negative (122,133) in the second quarter 2009, and positive 5,965 in the first quarter 2009. The Class-B office market recorded net absorption of negative (18,095) square feet in the fourth quarter 2009, compared to negative (260,093) square feet in the third quarter 2009, negative (876,925) in the second quarter 2009, and negative (301,006) in the first quarter 2009. The Class-C office market recorded net absorption of negative (95,142) square feet in the fourth quarter 2009 compared to negative (243,082) square feet in the third quarter 2009, negative (333,198) in the second quarter 2009, and negative (206,765) in the first quarter 2009. Net absorption for Atlanta’s central business district was negative (138,538) square feet in the fourth quarter 2009. That compares to negative (121,273) square feet in the third quarter 2009, negative (338,243) in the second quarter 2009, and negative (50,727) in the first quarter 2009. Net absorption for the suburban markets was negative (396,846) square feet in the fourth quarter 2009. That compares to negative (402,265) square feet in third quarter 2009, negative (994,013) in the second quarter 2009, and negative (451,079) in the first quarter 2009.

Vacancy
The office vacancy rate in the Atlanta market area increased to 16.8% at the end of the fourth quarter 2009. The vacancy rate was 16.6% at the end of the third quarter 2009, 16.0% at the end of the second quarter 2009, and 15.1% at the end of the first quarter 2009. Class-A projects reported a vacancy rate of 18.6% at the end of the fourth quarter 2009, 18.2% at the end of the third quarter 2009, 17.2% at the end of the second quarter 2009, and 16.4% at the end of the first quarter 2009. Class-B projects reported a vacancy rate of 15.9% at the end of the fourth quarter 2009, 15.8% at the end of the third quarter 2009, 15.5% at the end of the second quarter 2009, and 14.6% at the end of the first quarter 2009. Class-C projects reported a vacancy rate of 14.9% at the end of the fourth quarter 2009, 14.7% at the end of third quarter 2009, 14.1% at the end of the second quarter 2009, and 13.4% at the end of the first quarter 2009. The overall vacancy rate in Atlanta’s central business district at the end of the fourth quarter 2009 increased to 14.0%. The vacancy rate was 13.6% at the end of the third quarter 2009, 13.2% at the end of the second quarter 2009, and 12.3% at the end of the first quarter 2009. The vacancy rate in the suburban markets increased to 17.2% in the fourth quarter 2009. The vacancy rate was 17.0% at the end of the third quarter 2009, 16.4% at the end of the second quarter 2009, and 15.6% at the end of the first quarter 2009.

-Source: Costar