Office Vacancies at 19.3%, Expected to Rise

ATLANTA-There is good news and bad news for Atlanta office property owners, according to a new first-quarter report by Marcus & Millichap.

The good news is that the 6.4 million sf of available sublease space is expected to decline over the next 12 to 24 months and prices for investment-grade properties are projected to continue rising.The bad news is that vacancies of 19.3% are expected to climb to 19.5% over the next year and rents are projected to drop by 1.5%. Earlier this year, the average effective rent dipped to $17 per sf, a 3.8% slide from first quarter 2002.

There is an estimated 25 million sf of office space available in metro Atlanta, according to Erica L. Leebove, senior market analyst at Marcus & Millichap, who edited and prepared the report.