Next year, new projects to be delivered include 2002 Summit Blvd., a 390,000-sf project; One Glenlake totaling 353,000 sf; and the 440,000-sf Centergy Technology Square. Two of these office developments have significant pre-leasing commitments in place, Boyd says.

The amount of vacant space on the market has increased from 9.47 million sf during the 2Q 2001 to 16.24 million sf. "These results have definitely created a buyer's office market with concessions available in free rent, lease assumptions, lower rental rates and increased tenant improvement allowances," Boyd says. "Subleases, although a secondary market, totaling over five million sf, are also having an adverse effect on the market."

The urban corridor is "continuing to fare much better than the suburban markets with occupancy rates approaching 90%," Boyd tells GlobeSt.com. Meanwhile, availability stands at about 15.5% in the suburbs.

Quoted rental rates remained stable throughout Atlanta at an average $21.54 per sf. In the urban corridor, rental rates are $24.24 per sf, while suburban properties fetch about $20.28 per sf.

"Nonetheless, the office market has bottomed and will improve dramatically by year-end 2002," Boyd says. "There is only 160,000 sf of suburban office buildings scheduled for delivery for the remainder of 2002."

He says that with an improved economy, "we are projecting positive absorption of approximately three million sf for calendar year 2002." Boyd projects the office market will improve to the 89% to 90% occupancy range and average rental rates will increase to about $22 per sf.