ATLANTA—Overall asking rental rates continued to ascend to their highest level on record but the class A sector experienced its first pullback since 2013. So says PMRG's fourth quarter office report. But the tech sector is bringing a positive spin on the quarter.
“At the forefront of this robust job growth is the technology center,” Bill Weghorst, president of PMRG's Eastern Division, tells GlobeSt.com. “The record number of technology related jobs have been a huge boon to the office sector. Over the last 4 years, we have added more jobs than ever before, and as result Atlanta has absorbed over 12 million square feet of office space. A large part of this growth is a result of technology companies relocating to metro and existing technology companies expanding at the same time.”
PMRG predicts pre-leasing in new construction projects to remain strong in 2018 as this new product will provide tenants with much needed relief with more space options to expand and/or relocate. With tenants demanding more amenities and controlled environments for recruitment and retention purposes, the firm says, property owners will focus upon significant capital improvement programs to enhance their assets to remain competitive in retaining and attracting tenants.
“Another sign that Atlanta's office market is chugging on all cylinders and as health as it has ever been is the fact that Atlanta saw 2.2 million square feet of new office delivered in 2017 and occupancy rates held steady between 85% to 86%,” Weghorst says. “On top of that note, class B office continues to see positive occupancy gains as some tenants look for less expensive options to more traditional class office space, where rates have increased 30% or more in some instances in just the last few years.”
(What really drove a decline in transaction volume? Check out one opinion.)
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