Office Market Report: Summer 2023 by skcr

OFFICE MARKET REPORT: SUMMER 2023

Atlanta’s office market suffered the third-worst quarterly absorption amount of -1.7 MSF, after Q4-20 (-1.9 MSF) & Q1-21 (-3.1 MSF). YTD the market is -2 MSF in absorption and on pace for one of its worst years ever. Vacancy rates climbed 100 basis points while rental rates continue to rise, as landlords need to get higher rates in the face of stiff concessions. Amenity-rich, walkable buildings are better at retaining tenants than basic buildings, and several large employers like AT&T and Meta have called for their employees to be back in the office at least 3 days a week.

NET ABSORPTION, DELIVERIES, & VACANCY RATE

ATLANTA

VACANT SF 1230 P’TREE ST – DELOITTE MIDTOWN - 71,870 SF 3225 NORTH

PKY

15,003 SF 1115

39.5 MSF TOP LEASE TOP DELIVERABLE TOP SALE % VACANT 22.6% QRT NET ABSORPTION (1.7 MSF) DELIVERED SF 15,003 SF UNDER CONS. SF 2.9 MSF QUOTED RATES SALES PRICE $31.24 $435 / PSF

POINT

FULTON / FORSYTH -

HOWELL MILL RD NW MIDTOWN - $215 M

4M SF 25% 20% 15% 10% 5% 0% 3M SF 2M SF 1M SF(1M SF) (2M SF) (3M SF) 2017 2018 2019 2020 2021 2022 2023 YTD NET ABSORPTION NET DELIVERIES VACANCY RATES

ABOUT SKCR OCCUPIED VS VACANT

SK Commercial Realty is a full-service real estate brokerage selling, buying, and leasing office, industrial, medical, retail, and land properties. We offer project consulting services, property management, accounting, and investment services. SKCR is committed to our clients, partners and employees, our industry, and the community.

SATLANTANORTHLAKENORTHEASTDOWNTOWNBUCKHEADNFULTONMIDTOWNCENTRALPERIMETERNORTHWEST

We have been providing effective real estate solutions to clients throughout the southeast since 1985. Each transaction is treated with the same level of care and attention no matter the size or type, and each is managed by an experienced and knowledgeable team of brokers. SKCR has developed and acquired over 5,000,000 square feet of property, and has also grown to accomodate over 25 brokers and a team of nearly 20 staffed accountants, managers, architects, marketing professionals, and leadership roles. SKCR has won the Cobb County Small Business of the Year award several times, making them the leading independent commercial real estate brokerage in the county.

Learn more by visiting www.skcr.com or calling 404.252.1200.

Source: CoStar data comprised of metro Atlanta office market spec. buildings 15,000 RSF and greater. Report by Scott Crooks and Claire Blevins. Copyright 2023. Submarket Inventory SF Total Vacant SF % Vacancy Qrt Net Abs. Delivered SF Under Cons. SF Quoted Rates Buckhead 21,530,140 5,601,468 26.0% (835,017) - 129,751 $36.91 Central Perimeter 26,276,970 6,675,587 25.4% (464,134) - 100,905 $31.19 Downtown 17,645,505 4,097,332 23.2% (49,039) - 618,871 $31.42 Midtown 25,896,631 5,823,048 22.5% 51,485 - 1,818,250 $41.79 Northeast 15,819,630 3,026,439 19.1% (119,541) - 85,580 $21.76 North Fulton 22,160,016 5,304,056 23.9% (185,195) 15,003 164,546 $26.11 Northlake 11,452,256 2,121,054 18.5% (61,973) - - $24.94 Northwest 26,253,138 5,466,148 20.8% (167,351) - - $27.76 South Atlanta 6,026,079 615,617 10.2% 74,153 - 30,149 $21.99 West Atlanta 1,798,419 746,594 41.5% 30,518 - - $31.80 Totals 174,858,784 39,477,343 22.6% (1,726,094) 15,003 2,948,052 $31.24 CBD Totals Inventory SF Total Vacant SF % Vacancy Qrt Net Abs. Delivered SF Under Cons. SF Quoted Rates Class A CBD 50,321,012 12,737,154 25.3% (644,007) - 2,566,872 $38.57 Class B CBD 11,490,167 2,047,307 17.8% (147,813) - - $33.33 Class C CBD 3,261,097 737,387 22.6% (40,751) - - $27.57 CBD Totals 65,072,276 15,521,848 23.9% (832,571) - 2,566,872 $37.29 Suburban Totals Inventory SF Total Vacant SF % Vacancy Qrt Net Abs. Delivered SF Under Cons. SF Quoted Rates Class A Suburban 62,007,001 15,755,934 25.4% (687,711) - 293,519 $29.52 Class B Suburban 42,517,821 7,555,469 17.8% (132,593) 15,003 87,661 $22.97 Class C Suburban 5,261,686 644,092 12.2% (73,219) - - $22.08 Suburban Totals 109,786,508 23,955,495 21.8% (893,523) 15,003 381,180 $27.32 WATLANTA 5M (41.5%) (10.2%) (18.5%) (19.1%) (23.2%) (26.0%) (23.9%) 15M OCCUPIED SF VACANT SF 10M 20M 25M

(22.5%) (25.4%) (20.8%)

Office Market Report: Summer 2023