Atlanta Office Market
Annual full-service asking rental rates continues to increase, reporting a new historical high of $32.98/SF, reflecting a 3.4% increase year over year. While the rental rate growth in 2024 was slightly higher than the 3.2% reported in 2023, the annual pace of rent growth has generally been declining since 2017. Although net absorption was positive 62,785 SF in the fourth quarter of 2024, three new buildings delivered vacant. As a result of supply outpacing occupancies, the vacancy rate increased by 20 basis points quarter over quarter to 26.2%. The under-construction pipeline continues to consistently slow, declining by 61.5% quarter over quarter to 522,000 SF, the lowest level in recent years. The historically low pipeline along with no new construction starts in 2024 will improve the supply-demand imbalance. The average deal size for all classes in the fourth quarter of 2024 was 6,714 SF, with Class A deal size continuing to be larger at 8,981 SF on average.
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Atlanta Industrial Market
Net absorption in the fourth quarter of 2024 nearly doubled quarter over quarter to 2.5 MSF. Supply surged significantly in the fourth quarter of 2024, more than tripling in square footage quarter over quarter to 7.5 MSF. The vacancy rate increased by 50 basis points quarter over quarter to 8.6% due to supply outpacing demand by nearly 5.0 MSF. Industrial average asking rents dipped 1.2% year over year to $6.87/SF in the fourth quarter of 2024. Despite the year-over-year decrease, rents are only 1.6% lower than the historical high of $6.98/SF reported in the previous quarter. The construction pipeline trended downwards for the sixth consecutive quarter to 10.6 MSF in the fourth quarter of 2024. This reflects a 38.9% quarter-over-quarter decline, the steepest percentage change in square footage under construction in recent years.
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