Atlanta Office Report – Winter 2020

Boosted by solid fundamentals, the sector's healthy demand is being matched by a fitting pipeline.
Office-using employment in Atlanta, click to enlarge
Office-using employment in Atlanta, click to enlarge

Atlanta’s office sector is underpinned by consistent supply-demand fundamentals, steady job growth, a relatively low cost of doing business and a diverse economy. Companies continue to expand in the metro due to its innovation-driving ecosystem and deep talent pool. Business Facilities’ 2019 Metro Rankings report ranked Atlanta No. 1 for growth potential. Some 200,000 people are employed in the tech sector and the metro is home to 15 Fortune 500 companies, according to the study. Atlanta gained 10,800 office-using jobs through October, with office-using employment accounting for 28.6 percent of the total workforce.

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Sustained tenant demand was matched by a robust development pipeline. As of November, 4.4 million square feet was underway in Atlanta, equal to 2.4 percent of total stock. Developers completed some 2.8 million square feet of office space in 2019 through November; last year’s completions exceeded 2018’s total deliveries when 1.9 million square feet reached completion.

Employment growth by sector in Atlanta, click to enlarge
Employment growth by sector in Atlanta, click to enlarge

Investor interest is solid as Atlanta continues to draw on strong market dynamics. Some 14.6 million square feet traded in the metro for a combined $2.4 billion last year through November. In line with national trends, office building prices have climbed on a dollar-per-square-foot basis to $190.95. Top-rated space in Atlanta brought in acquisition yields between 5.75 percent and 6.75 percent, while yields for Class B product hovered in the 7.25 percent to 8.25 percent range.

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