January 2008

Downtown Office Market Swings Up

What a difference a year makes, especially in Downtown Atlanta’s commercial office market.

“Frequently during the past five years, real estate pundits were predicting Downtown’s doom…company departures, sagging leasing and a bone-dry absorption rates,” said A.J. Robinson, President of Central Atlanta Progress.

Now, fast forward from 2006 to 2007. Downtown’s office space absorption has swung to the positive side and the signs look even better for the future, according to the most recent released figures by Dorey’s.

“In just one year, Downtown Atlanta’s office market net absorption (including Class A, B and C space) has gone from – 212,972 sq. feet to a + 428,516 sq. feet to the good. No, make that to the ‘very good’,” said Robinson. “These are our best results in seven years.”

“A swing of plus 641,488 sq. feet is phenomenal. From almost a quarter of a million in the hole, to close to a half a million on the positive side. That kind of market momentum is enough to raise people’s eyebrows.”

According to Robinson, the huge swing is like adding two completely leased-up buildings about the size of the Southern Company headquarters at 30 Ivan Allen Plaza.

Robinson went on to say that leases under discussion might even make the next period of office absorption figures even better. “There are some deals that are working that are not reflected in the most recent 2007 figure. That could lead to an even better story on the horizon for Downtown.”

According to the Dorey’s report, the only submarket topping Downtown’s growth rate was Buckhead, with Midtown actually showing some slippage. “When we can almost keep pace with Buckhead, we’re going to generate some attention,” said Robinson.