State of the City: Atlanta’s Mid-Year Market Industrial and Office Market Report

Integra Realty Resources (IRR) has released its mid-year report on Atlanta’s industrial and office markets, and the news is positive. Employment continues to improve, the real estate market is flourishing – especially intown – and the movie industry continues to boost Atlanta tourism. The outlook for the Atlanta industrial market is also strong with higher rents, lower vacancies and positive absorption.

Here is a closer look at the industrial and office market indicators:

Employment

• Through June, Atlanta employment exceeded 2.6 million, which is 400,000 above prerecession levels
• The state’s mid-year unemployment rate in June was 5.3%, down from 6% in 2015

Industrial Market

• Slightly declining vacancy rates
• New construction with high rents is fostering rental increases; rental escalations of 2% – 3% annually are projected
• Improving economy and growth of internet sales is spurring growth
• With 3.1 million square feet under construction, South Atlanta is the largest warehouse/distribution submarket
• Significant projects include:

1. One million square feet for speculative building at Majestic Airport Center IV
2. One million square feet in Social Circle for Baxter Pharmaceuticals

Office Market

• Several companies in the growing technology industry recently leased Midtown office space
• Increasing number of companies seek intown locations to attract millennials
• Tenants continue to seek higher quality office space
• Overall construction employment is surging as housing construction levels improve
• Suburban office vacancy rates are slightly declining

To view all IRR’s mid-year Atlanta reports, please click here.