In what may or may not be good news for Atlanta development watchers hoping for another iconic, sky-piercing office tower soon, statistics released today show that office vacancy rates across the city have reached their lowest levels since the Dawn of the Great Recession. According to real estate firm Cushman & Wakefield, a third-quarter analysis proves that only 16.8 percent of Atlanta office space is unoccupied — the lowest since 2008 — and that rents have bumped a whopping 5 percent since last year, marking the strongest growth since, again, 2008. The ATL market has seen 15 consecutive quarters of net-occupancy gains, continuing to drive vacancy down to pre-Recession levels and contributing to one of "the best rent growth environments in memory," researchers say. However, Samir Idris, a Senior Director with Cushman & Wakefield, pointed out that rent growth can be attributed to the high cost of building more supply right now, which has "kept a lid on new construction and allowed owners of existing inventory to increase occupancy and rents without challenge from new competitors," Idris said in a release.
Another factor is "significantly depleted land inventory" in Buckhead and Central Perimeter, which has spurred as much as 20 percent jumps in rent year-over-year at top properties. Until recently, most significant rent growth has occurred in those two submarkets, but the same trend is starting to happen in places like Midtown, Cumberland, Cobb Galleria and along Ga. Highway 400, officials said.
While Cushman & Wakefield still call Atlanta's pipeline of new office construction "conservative," they did point to a couple of big-time contenders under construction right now. Those include a 300,000-square-foot Class A project called Riverwood 200 in Cobb County, and the highly anticipated Three Alliance Center tower by Tishman Speyer, a 500,000-square-foot behemoth in the heart of Buckhead's business district. That project, thankfully, appears to have put its problems with a cratering foundation behind it.