According to the most recent “Emerging Trends in Real Estate” market report by PwC and the Urban Land Institute (ULI), Atlanta ranked 4th out of the 80 U.S. markets to watch in terms of overall real estate prospects for 2024. As part of the “Sun Belt,” markets in the Southeast are still affordable for businesses and residents, even while powerhouse economies like Atlanta have attracted – and will continue to attract – a wide range of businesses.
The city offers a strong pipeline of talent from Georgia Tech and other area universities at comparatively lower salaries. Atlanta’s wealth of engineering talent played a major factor in AirBnB’s decision to place a hub there. According to a recent report by NAI Brannon Goddard, Atlanta’s office market has weathered the coronavirus storm better than most markets so far. Georgia’s capital has landed big deals from Microsoft, Deluxe Corp., and Mailchimp since the pandemic.
According to Cushman & Wakefield’s recent Q3 2023 Atlanta office market report, a strong rebound in vacancy rates, absorption and leasing activity, and rental rates more than offset a sluggish start for 2022. While the return-to-office has been measured as employers continue to evaluate in-person work, office demand remained active in Q2. Suburban Atlanta continued to drive office demand, accounting for 66% of the positive increase in Q3 absorption.
The average rental rate for Atlanta office space, currently at $30.58 per SF, has increased for the 7th consecutive quarter. Atlanta was also among the national leaders in absorption gains. After recording 594K SF of absorption in Q3, the year-to-date total is now 1.3M SF. Despite national economic headwinds, healthy office leasing activity is expected to persist in subsequent quarters, keeping vacancies in check.
Atlanta has been fortunate in recent years, with residential growth and companies relocating their headquarters here. According to JLL’s managing director, there is a current trend toward a hub-and-spoke model, in which companies continue to have their corporate headquarters in cities like Los Angeles or Chicago but see all the advantages Atlanta offers from a talent, diversity, and cost of living perspective, and identified Atlanta as an ideal regional office to continue accelerating their growth.