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Absorption Causes Concern in Office Sector

ATLANTA-Over a million square feet came back to the market in 2008, pushing vacancy near 20%.

By Carl Cronan | Updated on December 31, 2008

ATLANTA-The local office sector posted at least 1.1 million square feet of negative net absorption in 2008, pushing overall vacancy to nearly 20% at year end, or 24 million square feet, according to Jones Lang LaSalle Inc. But what’s surprising about the numbers is that they weren’t any bigger.

“The statistics are actually better than we expected,” Lanie Rea, research manager of JLL’s Atlanta office, tells GlobeSt.com. “We’re not in as bad a position as we could be, and definitely not as bad as other metropolitan markets across the country.”

Atlanta’s area wide office vacancy ended 2008 at 19.5% overall, 17% direct, with close to 1.6 million square feet of new space added through the fourth quarter and 3.5 million square feet under construction, mostly in urban areas, JLL statistics show. Yet despite rising vacancy, Rea says asking rents remained relatively stable over the past year, at $21.71 per square foot.

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