Atlanta Office Market
Annual full-service asking rental rates increased to an all-time high of $31.79/SF, a 2.8% increase year over year. Overall vacancy rates increased by 80 basis points year over year to a near-historical high of 24.4%, driven by supply outpacing net absorption. The under-construction pipeline remained unchanged at 2.1 MSF from the third quarter of 2023, but has generally been slowing, which should lower the risk of overbuilding. The average deal for the fourth quarter of 2023 was 5,381 SF, an average of 10.9% more than the previous quarter but 14.3% less than a year ago.
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Atlanta Industrial Market
The market realized 1.9 MSF of net absorption in the fourth quarter of 2023, bringing year-to-date totals to 5.6 MSF. Overall rental rates were $6.83/SF, decreasing by 2.8% year over year from a recent historical high of $7.03/SF in the fourth quarter of 2022. The construction pipeline trended downward for the fifth consecutive quarter, reporting 27.8 MSF under construction, creating a possibility for potential supply constraints as economic conditions improve. Following the recent trend of supply outpacing demand, vacancy increased in the fourth quarter of 2023 by 150 basis points year over year to 5.4%.
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