Small business office leasing rises

The sluggish Atlanta office market is providing opportunities for small businesses seeking space, a new real estate report says.

The number of small-office transactions —- those under 10,000 square feet —- rose about 7 percent in the first quarter, according to the research firm Grubb & Ellis. That occurred in a market in which total leasing was off 50 percent compared to the fourth quarter.

“The technology and financial services sectors were especially active with a number of start-up firms securing office space,” the report states.

Dan Wagner, research manager in Grubb & Ellis’ Atlanta office, said “the metro Atlanta area has seen some of the steepest job losses in the nation, and the real estate market is a lagging indicator of that trend.”

The report says office vacancy increased slightly in the first quarter to 19.3 percent, and landlords are “eager to renew existing tenants early” and entice new tenants with improvement packages and free rent. More than 3.5 million square feet of office space is under construction in six metro markets.

“Between ongoing corporate downsizing and the 2.7 million square feet of new Class A construction scheduled to hit the market in the coming year, it will take us a significant amount of time to absorb the excess space,” Wagner said.