Thanks to a limited supply pipeline and steady demand, Atlanta’s office market is as healthy as it has been in decades. Even though construction is ramping up, the amount of new supply underway still falls short of Atlanta’s historical average. Still, several recently announced projects could send construction levels higher in the near future, with much of that expected to break ground on a speculative basis. Due to consistently strong fundamentals, rent growth continues to outperform both the metro’s historical average and the national average.
Demand is diversifying across industries and submarkets. While Buckhead and Midtown have always attracted big office users, many of the largest leases signed in Atlanta over the past several years have involved large national companies in submarkets outside the core.
Investment activity in Atlanta remains robust. Over 80% of institutional-grade assets have traded at least one time over the past seven years, which may be a partial cause for a slow down in investment volume from mid-cycle highs. Average pricing continues to increase and average cap rates have compressed to levels well below last cycle’s trough.