Demand for metro Atlanta offices and warehouses has continued at a ripping pace lately, with the lowest office vacancy rate and the fastest industrial construction pace in more than a decade, according to local real estate data firm.
The tightening market is pushing rents higher as well, the firm said.
Metro Atlanta’s vacancy rate for Class A, or prime, office space dropped to a 14-year low of 15.1 percent in the second quarter, according to commercial real estate firm CB Richard Ellis’ local research department. About 70 percent of Atlanta office properties are in that category.
Demand was even hotter in the Buckhead area, where vacancies for prime office space dropped to 13.5 percent from nearly 19 percent two years ago, said CBRE.
A combinations of job growth and corporate relocations and expansions is fueling demand. Corporate tenants are setting up new shops in Midtown, Gwinnett County and Sandy Springs.
Average office rents rose almost 2 percent in the second quarter, according to CBRE.
With no significant new office buildings expected to open until next year, “the Atlanta market will see increasing rental rates through the remainder of 2015,” said Dan Wagner, CBRE’s southeast regional research manager.
Meanwhile, the amount of new warehouses and industrial buildings being built in metro Atlanta is “unprecedented,” CBRE said, with a record 18.1 million square feet underway — four times higher than a year ago.
Industrial vacancies are at a 13-year low, but about 70 percent of the projects are speculative, or being built without a tenant signed up, CBRE said.
“As Atlanta has proven itself as the Southeast’s distribution hub, larger and more established companies look to either expand their footprint in the area, or relocate here entirely,” said Wagner. “Developers are paying attention.”
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