Atlanta Office & Industrial Market: Midyear 2024
July 25, 2024Atlanta Office & Industrial Market: Third Quarter 2024
Third Quarter 2024
Leasing activity remains steady as employers implement in-office requirements
Atlanta has demonstrated remarkable resilience despite ongoing economic turbulence. In 3Q 2024, leasing volume reached 2.2 million square feet (MSF). Availability remains above the 10-year average, but the market shows signs of recovery. The newest buildings in vibrant locations continue to attract a significant share of new absorption. Supply-side pressure should diminish as construction starts falling. Atlanta’s under-construction office pipeline is at its lowest level in about a decade.
The first half of 2024’s total sales volume was about 10% lower than the first half of last year. Sales are anticipated to pick up in the back half of 2024 as sellers begin to meet the market.
Atlanta’s long-term appeal remains strong due to its broad industry base, lower cost of living, diverse talent pool, and strong job growth in finance, professional services, and tech sectors.
Leasing activity strong; construction slows after record supply wave
Over the past year, the Atlanta industrial market has seen a downshift from the flurry of activity several years ago. The area’s vacancy rate has now risen to 7.7%, above the market’s 10-year average of 5.8%.
Atlanta’s net absorption has been inconsistent quarter to quarter for the past year. The number of new industrial leases over 200,000 square feet is picking up somewhat after a slump in early 2023. Since the start of the year, 26 of these leases have been signed, compared to 22 for the same period last year.
Atlanta still offers lower living and business costs compared to major East and West Coast metros, which are likely to continue attracting population and job growth. Over the past few decades, Atlanta has experienced significant in-migration, with many employers noting substantial savings from relocating operations to the area without sacrificing access to quality labor.