Thank you for sharing!

Your article was successfully shared with the contacts you provided.

ATLANTA-Job losses, vacated space that was previously leased, and empty newly delivered office projects combined with the “uncertain timing of an economic recovery, (have) caused many to doubt the vitality of the market near term,” says a second quarter 2002 Atlanta MSA office market report authored by Scott Olson, managing partner of locally based-Bullock Mannelly Partners and Michael Crawford, research director.

Long-term, they look to Atlanta’s low cost of living, affordable housing and projected employment growth for recovery.

Construction activity continued strong during 2001, particularly in the North Fulton submarket and Midtown, contributing to the current surplus. “With fading demand, Olson and Crawford note that “several projects have been sidelined or cancelled,” most notably a 453,000-sf, 10-story Georgia Pacific property planned for downtown.

Atlanta’s absorption rate turned positive in first quarter 2002 “yet remained unimpressive,” the authors say. Midtown posted the highest gain, while areas that had been strong –North Fulton, Central Perimeter, Northlake and Buckhead –all recorded negative absorption levels in this year’s first quarter.

Overall office vacancy rates have climbed steadily since they reached 13.7% in fourth quarter 2000. “Class A owners are hurting the most,” according to the report, currently averaging 19.8%. Vacancy rates at class B and C properties, are 18.3% and 18.9%, respectively.

The number of owners offering concessions “has notably increased during the last 12 months,” states the report. In addition to free rent and higher tenant improvement allowances, owners are reportedly reimbursing tenants, especially creditworthy ones, for moving costs and lease buyouts.

On average, rental rates are said to hover between $20 and $21 per sf.

As the rise in vacancy widens the gap between buyers’ and sellers’ expectations, Crawford and Olson conclude, “sales activity will likely remain flat in 2002. However, an uptick in interest rates of 200 basis points or more, could force investments to market as cash reserves dry up.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.