After a rocky fourth quarter, Atlanta’s office market finished 2020 with a net occupancy loss totaling 250,968 square feet, according to the Colliers Atlanta Year-End 2020 Office report. Colliers attributed Atlanta’s poor performance in 2020 to the ongoing Covid-19 pandemic.
Across all of Atlanta, every core office submarkets except for Central Perimeter ended the year with occupancy losses. The negative end to the year resulted in Atlanta’s office vacancy increasing to 14.5% overall and 17.4% for Class A. Those numbers mark the highest levels the market has seen in six years.
Additionally, the average rental rate for Atlanta office declined for the first time in seven years. Colliers predicts that the upwards trend in rental rates the market experienced is likely over for some time. Future absorption gains are expected to be limited as a result of only half of the leasing activity of the past several years taking place in 2020.
However, all is not doom and gloom according to Colliers, as Atlanta remains as one of the most attractive and stronger office markets in the nation despite current headwinds. The city continues to win headquarter relocations, such as the Papa Johns headquarters deal, which was announced in November. The metro are also continues to solidify its reputation has a growing tech hub with Microsoft’s 523,000-square-foot lease in Midtown and Mailchimp’s future expansion to 300,000 square feet in a new building as well as Google’s expansion of 300,000 square feet at 1105 West Peachtree.
David Cohen is Southeast Editorial Director at Connect Commercial Real Estate. David is a media veteran with more than 10 years of experience in journalism, copywriting and communications across a variety of roles.
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