If it seems like everything about metro Atlanta is becoming more expensive by the day, that might just be because it is.
Usually that’s illustrated by the higher costs of living. But rent prices aren’t just rising for residences; office space is becoming more expensive, too.
According to a report by Bisnow Atlanta, citing Transwestern research, office rents in metro Atlanta have reached an all-time high, and the amount investors are willing to pay for Class A space is setting records as well.
Earlier this month, metro Atlanta office buildings were trading for an average of $244.30 per square foot—a considerable jump from the $229 per square foot from last year.
And steady job growth—spiking in tandem with the metro population—is allowing landlords to hike office rents past the $50 per square foot mark for the first time, per Bisnow.
Granted, metro Atlanta is nowhere near as pricey as Manhattan, where Class-A office space sells for an average of $980 per square foot—more than four times the Atlanta mean.
Still, a couple of recent transactions locally saw office space trade for more than $400 per square foot.
When Cousins bought out joint venture partner JP Morgan Asset Management at Buckhead’s Terminus 100, for example, the deal valued the 1.2 million-square-foot property at $412 per square foot, according to the publication.
And earlier this week, Stockbridge Capital Group dropped almost $24 million for The Willoughby, a 60,000-square-foot office project on the Eastside Trail in Old Fourth Ward. That’s about $407 per square foot.
The price hikes can in part be attributed to the rising costs of construction; it tends to be far cheaper to buy office space than to build it new.
In fact, a report from last year showed that increasing construction costs have also been driving developers from the city to the suburbs, where land and labor are cheaper.