Fleeing tenants hurt office-space market

By Gertha Coffee

The Atlanta Journal-Constitution

Tenants vacating office space made the second quarter of 2009 the worst quarter for metro Atlanta’s office market since 2002, according to a new report.

Almost 400,000 square feet of office space was put back on the market in the second quarter because of downsizing, consolidations and bankruptcies, according to the report by commercial real estate firm Colliers Spectrum Cauble.

With metro Atlanta’s unemployment rate continuing to rise — it jumped to 10.7 percent in June — office vacancies will mount through the end of the year, the report said.

While the short-term outlook is bleak, 2010 could mark the beginning of recovery for the area’s office market, experts say.

“I’m cautiously optimistic,” said Scott Amoson, director of research at Colliers. “I think once we get through this year, 2010 is not looking too bad for the office market.”

There has been slightly more leasing momentum in the market, he said, including deals for space at new buildings coming online in Buckhead.

The challenge will be finding enough tenants for the 5 million square feet of office space vacated since the beginning of the recession, the report said.

Over the last three months, Macy’s downsized its regional headquarters in Atlanta by vacating 181,000 square feet of space and moving the lost jobs to New York, the report said. Other notable move-outs included Bank of America vacating 140,000 square feet of space at 2059 Northlake Parkway and Deloitte & Touche leaving 108,000 square feet at Peachtree Center.