The figure also represents the 11th consecutive quarter of positive absorption. For the full year of 2006, the office market experienced 1.8 million sf of positive absorption, the highest figure since 2000, according to the report. "The market is doing well. We've had little new development," Richard Bowers tells GlobeSt.com. "Atlanta has a growing economy and growing population."

Although activity has been strong, Bowers adds that the market has not been as strong as the late 1990s, which saw four to five million sf of positive absorption per year. "The market is in more of a recovery mode," he says.

Overall average rental rates increased from $20.35 per sf at year-end 2005 to $20.53 per sf at year-end 2006, with occupancy levels increasing from 82.81% to 83.53%. The leading submarkets with respect to absorption during the fourth quarter were GA-400 North at 268,578 sf, Interstate 75/Interstate 285 at 215,363 sf, Interstate 75 Corridor at 98,188 sf, Buckhead/Lenox at 88,135 sf and Downtown at 84,381 sf.

Despite only 240,051 sf delivered in the fourth quarter, deliveries of new space in 2006 totaled 1,699,823 sf, significantly more than was delivered in 2005 and 2004. Projected deliveries in 2007 total 2,551,523 sf with 1,702,023 sf in the urban corridor and 849,500 sf in the suburbs.

"We think 2007 will be a year that continues to show improvement in occupancy levels and rent rate levels," Bowers says. "There is a continuation of an urban renaissance occurring in Atlanta. The urban corridor is continuing to expand residentially and commercially and the office market reflects this trend."

According to the report, the market remains favorable for space users requiring large blocks of space, particularly for creditworthy tenants. However, several submarkets and areas within submarkets are tightening significantly, resulting in far fewer concessions and increases in quoted rental rates.

"For 2007, we are projecting an increase in absorption over 2006 along with an increase in occupancy levels either reaching or exceeding 85%. Excellent opportunities exist in the submarkets affording the greatest square footage availability--Downtown, Interstate 75/Interstate 285, Interstate 285/GA-400, GA-400 North and Buckhead/Lenox," the report states.