ATLANTA—Strong job growth, along with relocating and expanding companies, is the storyline in Atlanta. That's according to CBRE Research's 2017 Southeast US Real Estate Market Outlook.
That growth is driving a diverse economy that serves as a shield from economic hiccups in any single industry sector. In fact, CBRE projects Atlanta will be the most resilient market in the US in the face of a potential recession.
What's more, as the national war for talent increases, Atlanta is in a good position to capitalize on its young, educated workforce with top universities such as Georgia Tech, Emory University and Georgia State University. At the same time, capital improvements—investments in two new stadiums under development—have spurred further development, entertainment and infrastructure improvements.
“Due to rapid growth, the Southeast is emerging as an economic powerhouse,” Dan Wagner, CBRE Southeast director of research, tells GlobeSt.com. “The growth is strong, diverse and permeates across markets.”
Atlanta finished 2016 with vacancy at its lowest point in 15 years and a record high asking rent. Solid fundamentals are leading to a significant amount of new construction, over 1.5 million square feet of which is speculative space. Asking rents should continue to rise as new office product will demand higher rents, and strong leasing velocity is expected to continue with the growth of tech and insurance industries. (Will Atlanta Office Values Keep Rising?)
CBRE's 2016 Scoring Tech Talent report highlighted Atlanta as a market that features two critical components for long-term growth in the tech industry: high educational attainment and affordability. This should bode well for the long-term sustainability of current rates of growth both in terms of attracting new companies to the market as well as organic growth to the 25 Fortune 1000 companies headquartered in the market.
The increasing competition for core assets in primary markets is shifting many investment firms, especially international ones, to consider Atlanta as a market that blends the stability found in the U.S. with the long-term growth prospects of being the largest office market in the Southeast. The report finds that Atlanta is an international gateway market, which, combined with Miami, accounts for more than 50% of the international commercial real estate investment activity in the Southeast.
Atlanta is the distribution hub for the Southeast, with easy access to half of the US population. Because of its accessibility, affordability and positive market conditions, Atlanta is emerging as the most desirable location for a distribution hub on the east coast.
Over the past three years, rent increases have been consistent but overall asking rents remain low compared to the rest of the country. As available space continues to dwindle, new development, both speculative and build-to-suit, remains strong. As speculative product hits the market, much-needed availability will be introduced back into the inventory. Consequently, space options for tenants will improve and an uptick in average rents is likely.
ATLANTA—Strong job growth, along with relocating and expanding companies, is the storyline in Atlanta. That's according to CBRE Research's 2017 Southeast US Real Estate Market Outlook.
That growth is driving a diverse economy that serves as a shield from economic hiccups in any single industry sector. In fact, CBRE projects Atlanta will be the most resilient market in the US in the face of a potential recession.
What's more, as the national war for talent increases, Atlanta is in a good position to capitalize on its young, educated workforce with top universities such as Georgia Tech, Emory University and Georgia State University. At the same time, capital improvements—investments in two new stadiums under development—have spurred further development, entertainment and infrastructure improvements.
“Due to rapid growth, the Southeast is emerging as an economic powerhouse,” Dan Wagner, CBRE Southeast director of research, tells GlobeSt.com. “The growth is strong, diverse and permeates across markets.”
Atlanta finished 2016 with vacancy at its lowest point in 15 years and a record high asking rent. Solid fundamentals are leading to a significant amount of new construction, over 1.5 million square feet of which is speculative space. Asking rents should continue to rise as new office product will demand higher rents, and strong leasing velocity is expected to continue with the growth of tech and insurance industries. (Will Atlanta Office Values Keep Rising?)
CBRE's 2016 Scoring Tech Talent report highlighted Atlanta as a market that features two critical components for long-term growth in the tech industry: high educational attainment and affordability. This should bode well for the long-term sustainability of current rates of growth both in terms of attracting new companies to the market as well as organic growth to the 25 Fortune 1000 companies headquartered in the market.
The increasing competition for core assets in primary markets is shifting many investment firms, especially international ones, to consider Atlanta as a market that blends the stability found in the U.S. with the long-term growth prospects of being the largest office market in the Southeast. The report finds that Atlanta is an international gateway market, which, combined with Miami, accounts for more than 50% of the international commercial real estate investment activity in the Southeast.
Atlanta is the distribution hub for the Southeast, with easy access to half of the US population. Because of its accessibility, affordability and positive market conditions, Atlanta is emerging as the most desirable location for a distribution hub on the east coast.
Over the past three years, rent increases have been consistent but overall asking rents remain low compared to the rest of the country. As available space continues to dwindle, new development, both speculative and build-to-suit, remains strong. As speculative product hits the market, much-needed availability will be introduced back into the inventory. Consequently, space options for tenants will improve and an uptick in average rents is likely.
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