Editor’s note: Welcome to our new weekly commercial real estate column. Shaun Weinstock and Dotan Zuckerman, our real estate experts, will give you a behind the scenes look of possible scenarios that explain the openings and closings we cover, through their industry insights (you know, what your mom never told you). We’re launching the series by examining the current state of commercial real estate in Atlanta. Enjoy — caleb j. spivak
It’s equivalent to 33 Bank of America Plaza Towers sitting completely empty
What was once an Atlanta commercial market equivalent to the adult entertainment at the Cheetah is now the equivalent of the 2 a.m. dancers at Clermont Lounge.
In all seriousness, like many metropolitan cities, the last few years of real estate in Atlanta can be defined by overbuilding and blitzing the market with more product than it can actually absorb.
Hardest hit is the office market. Metro Atlanta has an inventory of 139 million square feet of office buildings. The amount of vacant office space in Atlanta stands at record 39.3 Million square feet, eclipsing the old record of 35.4 Million square feet.
That is the equivalent of 33 Bank of America Plaza Towers sitting completely empty and dark (Atlanta’s tallest building).
On the surface retail has done slightly better than office, but Landlords continue to be haunted by tenants’ closing, defaulting on rent, or downsizing.
Landlords that have large shopping centers are struggling to replace the massive anchor retailers of old (Blockbusters, Circuit City, etc). The vacancy rate for retail in Metro Atlanta actually improved from the start to the finish of 2010 and ended at 10.3 percent.
Currently, there are a handful of new retail projects still pressing forward with the hope to be complete in a more favorable 2011 retail market but there are zero speculative office buildings scheduled to deliver, and it could be another 4 years before we see another spec development grace the Atlanta skyline.
While recovery is in the foreseeable future, as once sang by The Beatles, it is a “Long and Winding Road.”
8 Responses
tell us something we dont already know. i dont need to be an expert to tell you that
Jack Trent,
If you knew about the experts’ Cheetah/Clermont analogy, you’d have invented the Cheetah/Clermont analogy.
Great addition to the website…Looking forward to more articles!!!
Great insight. Always nice to hear from the people who are in the trenches. This is the type of stuff I would like to see more of. To Jack: I am sure your mama told you this once…if you don’t have anything nice to say, don’t say anything at all.
Hopefully, with experts like Weinstock and Zuckerman out in the market we’ll see some quick turnarounds this year in the Atlanta market! It’s refreshing to read an accurate article on the city’s real estate market and not the usual rosy glasses take. Keep the articles coming guys.
uhhhhhhhh didn’t the AJC write this same info up like 6 months ago?
http://www.ajc.com/business/atlanta-office-space-remains-582569.html
Very helpful, thanks!
only about 20 million square feet of that is actually class A, and of that, less than 9m is actually inside atlanta. it’s bad here, but it’s not the worst of our problems. (never-ending bank failures, foreclosures, the falcons and nathan deal)
even houston, drowning in it’s oil wealth right now, has about 30 million square feet of vacant space! (interestingly, also according to colliers, only slightly less total office space than we have – 201M v 195M)