Steve Hall, Transwestern senior vice president, left, and Keith Pierce, Transwestern director of research for the Southeast US

ATLANTA, GA—Rising demand for Atlanta's medical office space resulted in the decrease in market vacancy to nine percent in first quarter 2018, its lowest level since 2003. According to research by Transwestern, absorption posted at 372,377 square feet, nearly twice the space absorbed in fourth quarter 2017 and more than half of 2017's total.

“Healthcare continues to be a growth engine for Atlanta's economy,” says Steve Hall, Transwestern senior vice president. “Due to low vacancy and limited construction, medical office demand at hospital campuses is significantly outpacing supply. Increased leasing activity has pushed rents up by three percent year over year, and we foresee heightened investor interest in the market as a result.”

First quarter 2018 demand was strongest in the North Fulton and Northwest submarkets, where there is little to no new medical office construction, followed by South Atlanta. At the close of the quarter, 548,291 square feet was under construction throughout Atlanta, most of which is in submarkets with a very low vacancy rate. About two-thirds of the developing space is already leased. Medical office asking rates now average $23.10 per square foot, and the average sale price is at $374 per square foot.

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Steve Lubetkin

Steve Lubetkin is the New Jersey and Philadelphia editor for GlobeSt.com. He is currently filling in covering Chicago and Midwest markets until a new permanent editor is named. He previously filled in covering Atlanta. Steve’s journalism background includes print and broadcast reporting for NJ news organizations. His audio and video work for GlobeSt.com has been honored by the Garden State Journalists Association, and he has also been recognized for video by the New Jersey Chapter of the Society of Professional Journalists. He has produced audio podcasts on CRE topics for the NAR Commercial Division and the CCIM Institute. Steve has also served (from August 2017 to March 2018) as national broadcast news correspondent for CEOReport.com, a news website focused on practical advice for senior executives in small- and medium-sized companies. Steve also reports on-camera and covers conferences for NJSpotlight.com, a public policy news coverage website focused on New Jersey government and industry; and for clients of StateBroadcastNews.com, a division of The Lubetkin Media Companies LLC. Steve has been the computer columnist for the Jewish Community Voice of Southern New Jersey, since 1996. Steve is co-author, with Toronto-based podcasting pioneer Donna Papacosta, of the book, The Business of Podcasting: How to Take Your Podcasting Passion from the Personal to the Professional. You can email Steve at [email protected].