Metro Atlanta office vacancy rate climbs in 2nd quarter

By Gertha Coffee

The Atlanta Journal-Constitution

Job losses contributed to Atlanta’s 20.2 percent office vacancy rate in the second quarter of this year, up slightly from the first quarter, according to a report released this week.

Metro Atlanta also saw negative absorption of 633,359 square feet in the second quarter -- nearly 70 percent of the total negative absorption year-to-date, according to a report by real estate services and investment firm Grubb & Ellis. Absorption rate is move-ins minus move-outs.

“The real estate market lags employment levels, so we didn’t start seeing the effects on occupancy levels of the 57,000 jobs lost in the first quarter of the year until recently,” Steve Dils, executive vice president and managing director of Grubb & Ellis’s Atlanta office, said in a statement.

Dils said metro Atlanta job loss slowed in April and May, “which we view as a hopeful signal that the pace of occupancy losses in the real estate market will slow as well in the coming quarters.”

Commercial real estate giant Cushman & Wakefield reported an office vacancy rate of 18 percent in metro Atlanta. The company said in its report that while recovery of the real estate market seems unlikely until 2010, Atlanta’s long-term prospects are good because of its population growth, diversified industry base, corporate re-locations to the city and its status as a logistics and distribution hub.