ATLANTA—Office space construction is slowing in Atlanta. There are at least three factors for this, one clear result, and a discussion about solutions to that growing problem.

Tony Bartlett, an executive vice president of Lincoln Property Company in Atlanta who is responsible for the firm's commercial real estate activities in Georgia, tells GliobeSt.com the number of jobs per 1,000 square feet of office space—an industry-standard measure of density—has been increasing steadily since 2009. At its low in 2009, that measure was less than 3.4 jobs per 1,000 square feet. Today, it is nearing the 4 per 1,000 mark.

“Yet it's common these days for companies to fill office space at rates of 5 to 6 per 1,000, or higher,” Bartlett says. “In fact, some co-working companies can achieve office densities of 10 workers per 1,000 square feet of office space, demonstrating what is possible with this new wave of space use.”

To understand the significance of this, Bartlett throws out this fact: from an employer's perspective, the rent cost per employee at a 4-per-thousand square feet density at $20 per square foot is the same as $50 per square foot at a 10-per-1,000 density. That's more than double.

“Make no mistake: employers have every incentive to increase their use density and will continue to do so to alleviate the pressure of rising rents,” Bartlett says. “So, now that they have figured out how to fit more people into the same amount of space, the only limiting factor becomes logistics.”

In other words, how do you get all those people in and out of your building? His answer: build more parking. (But will that help this pain?)

“This especially makes sense in a region that lacks extensive commuter rail and whose highways are typically gridlocked—or collapsed,” Bartlett says. “That means for the foreseeable future, the importance of parking will only increase as companies increasingly rely on density to control cost.”

As he sees it, the likely starting spot for this new parking trend will be suburban office buildings with surface lots. Instead of building a new building elsewhere with more ample parking, he says, a better investment is to simply build on top of those surface lots.

“We've already heard about some landlords contemplating building more parking, including Mainstreet Capital and The Davis Companies at their 234,000-square-foot Northeast Center property in Tucker,” Bartlett says. “Given the current economics and trends, we expect to see more properties move in this direction. The bottom line is that what constitutes 'market' parking will continue to grow over the remainder of this cycle, while landlords who add parking now will reap dividends as demand for high-parking office properties outpaces the market as a whole.”

ATLANTA—Office space construction is slowing in Atlanta. There are at least three factors for this, one clear result, and a discussion about solutions to that growing problem.

In other words, how do you get all those people in and out of your building? His answer: build more parking. (But will that help this pain?)

Instant Insights /

Is This The Answer For Atlanta Office Challenges?

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