Worst could be over for Atlanta's office market

Overall, the average asking rent per square foot is $20.97,  but the rate of decline has slowed to 0.8 percent, according to the report, said Lanie Rea, research manager for Jones Lang LaSalle in Atlanta.

" To decline by less than 1 percent overall is good news for the market, " said Rea.

"What the numbers are telling us is good news," she said. "Rents are declining, but the rate of decline is slower, meaning we might be at the bottom of the cycle in terms of decline -- which means the next step could be recovery."

However,  she cautioned,  the market could see a double dip because of the large spike in vacancies in urban markets, particularly in Buckhead -- where the vacancy rate jumped to 22.8 percent, from 16 percent last quarter.

Two of four new office towers under construction in Buckhead came online, adding nearly a million square feet of vacant space to the market.

"We expected this to happen," Rea said. "Our worst fears came true. Last quarter, Buckhead had the lowest vacancy rate of any submarket in metro Atlanta. Now it's the highest of the urban submarkets. On a metro level, it is only surpassed by  the Northeast submarket, which has a 24.5 percent vacancy rate.

"The delivery of two buildings --Terminus 200 and Two Alliance Center --plus two more on the way really impacted vacancy rates. This is a scary prospect for Buckhead."

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