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Atlanta Office Rates Set All-time Record

ATLANTA—Atlanta's office market is hitting on all cylinders. Citywide, class A full-service gross asking rents for office space rose by $0.73,…

By Jennifer LeClaire | jenniferleclaire | | Updated on April 15, 2016
Office rental rates in Atlanta have jumped 7.8% or $1.89 within the past 12 months. Office rental rates in Atlanta have jumped 7.8% or $1.89 within the past 12 months.
ATLANTA— Atlanta’s office market is hitting on all cylinders. Citywide, class A full-service gross asking rents for office space rose by $0.73, according to PM Realty Group ‘s latest research. That set a new all-time high of $25.97 per square foot in the first quarter of 2016. Office rental rates in Atlanta have jumped 7.8% or $1.89 within the past 12 months. Class A direct occupancy rates have improved by 240 basis points to 86.5% over the prior 12 months due to solid leasing demand and limited office construction coming online. That means office rental rates have surpassed the prior peak recorded in 2008. “Even though net absorption this last quarter was far less than what we have seen in previous quarters, overall vacancy in Atlanta continues to tighten to historical record lows, pushing rental rates to record high levels,” Bill Weghorst , executive vice president of PMRG and managing director of the firm’s eastern division, tells GlobeSt.com. Atlanta’s office market kicked off the year with only 75,140 square feet of direct net absorption during the first quarter. “As vacancy levels continue to decline, we’ll probably see absorption decline, but with little new construction, rates should continue to increase in 2016,” says Weghorst. “The big question is will we see job growth over the next few years in excess of 60,000 new jobs per year.  If we do, values should continue to increase. Atlanta is Booming. Are You In The Know? Join us at RealShare ATLANTA on April 28 for impactful information from the leaders in Atlanta CRE.

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