Right now, almost 3 million square feet of office space is under construction in Midtown—or nearly half of the total across all of metro Atlanta. Which helps to explain the prevalence of so many Midtown cranes.
That’s continuing a trend into 2020 seen throughout a robust decade for the region’s office market overall, with Midtown being the epicenter, according to a recent analysis by Newmark Knight Frank, a longstanding Atlanta commercial real estate services firm.
The report proclaims Midtown “the clear ‘winner’ of the decade,” as metro Atlanta’s office market is concerned.
A key factor in Midtown’s success is an expanding Atlanta tech industry that boosted demand for offices in an urban environment near Georgia Tech, analysts noted.
Proof in that pudding is Fortune 500 company NCR Corp.’s decision to uproot from Gwinnett County to a new headquarters on Spring Street a couple of years ago. The same can likely be said for Google’s decision to claim 135,000 square feet at the under-construction 1105 West Peachtree project a few blocks away.
But the gorilla in the recent office-market room, as Newmark Knight Frank sees it, was the Coda project, where Georgia Tech’s 289,000-square-foot occupancy marked the region’s largest single tenant score of 2019.
Elsewhere, Midtown counts more office buildings under construction than any other Atlanta submarket.
Seven of those, totaling 1.2 million square feet, are expected to open in 2020. They include two new Atlantic Station projects and another relocated Fortune 500 headquarters, Norfolk Southern’s 750,000 new home at 650 W. Peachtree Street, per the report.
Across the past decade, Class A office rents for metro Atlanta ballooned by nearly 34 percent. For the first time in history, analysts found, the metro as a whole has seen asking rents surpass $30 per square foot
Since the economic quagmire of 2010, more than 11 million square feet of offices have been absorbed across the region.
One potential trouble spot, the report notes, is that new construction has outpaced demand for three consecutive years in metro Atlanta, lending concern that older properties could remain vacant.
“Atlanta’s office market experienced historic growth over the past five years,” Sean Moynihan, Newmark Knight Frank executive vice president and market leader, said in a prepared statement supplied to Curbed Atlanta.
“While the growth slowed in 2018, the fundamentals that underpin the region’s rise remain as attractive as ever,” Moynihan said. “We saw 2019 rebound with the second-highest net absorption in the past five years.”