Office-Leasing Picture Remains Blurred

ATLANTA-Metro’s 162-million-sf office market has seen better days. New construction, company consolidations and mushrooming sublease space have pushed the area’s overall vacancy level to 22.4% in the first quarter, up 0.7% from year-end 2003, according to a new market analysis by locally based Colliers Cauble & Co.

The 371-building, 83-million-sf class A market is 24.7% vacant with 1.2 million sf of new product under construction. The 70-million-sf class B market, comprised of 1,216 buildings, is 19.9% vacant with 260,994 sf of new construction under way. And the seven-building, 262,888-sf class C sector, with no new construction on tap, is 20.6% vacant. There is a total 36.2 million sf of available office space on the market.

Worse, net absorption grew to a negative one million sf, up from a negative 900,000 sf in fourth quarter 2003. Buckhead, Midtown and Northlake are the only submarkets showing positive absorption. Most of the new construction is in Midtown where the 138-acre, $200-million Atlantic Station redevelopment continues to be the driving engine of the area’s new growth pattern, area brokers tell GlobeSt.com.