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NAI Global: Market Facts & Trends 2024
April 25, 2024Atlanta Office & Industrial Market: Midyear 2024
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Second Quarter 2024
Despite high availability in Atlanta’s office market, leasing activity surpasses pre-pandemic averages.
Atlanta has demonstrated remarkable resilience despite ongoing economic turbulence. In 2Q 2024, leasing volume reached an impressive 2.9 million square feet (MSF), surpassing pre-pandemic averages. This represents a significant increase year over year and a notable improvement from the previous quarter.
While availability remains above the 10-year average, 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 also lessen in coming years as construction starts have fallen.
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.
Vacancy rises and construction slows after a record supply wave.
Atlanta’s industrial market is experiencing a slowdown after years of record-low vacancy rates and high leasing activity. Although net absorption remains positive at 2.3 million square feet, it falls short of the robust pre-pandemic pace. The overall industrial vacancy rate has risen above the 10-year average of 5.8%, marking eight consecutive quarters of increases. This year, total square footage delivered is projected to be over 30% lower than last year, which saw a record amount of space delivered.
Despite this slowdown, Atlanta still offers lower living and business costs compared to major East and West Coast metros, which is 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 by relocating operations to the area without sacrificing access to quality labor.