While Buckhead has traditionally been the jewel of the Atlanta office market, consistently attracting the highest rents and lowest vacancy rates of all the submarkets, Midtown has lagged just a bit behind its northern counterpart.
But, as 2016 has gotten started, it’s clear that Midtown has become a force of its own. Big-block space is being leased up very quickly and, as a result, rental rates have been rising rapidly in the submarket. Midtown’s Class A office overall average asking rents are now higher than in Buckhead, sitting at $32.67 to $31.88 in Buckhead. The Class A vacancy rate in Midtown is 13.9%, which is the lowest it’s been since before The Great Recession.
For the overall Atlanta market, the vacancy rate stayed at 16.2%, one full percentage point lower than it was in Q1 2015. With 245,000 square feet of net absorption, Q1 gave Atlanta its 18th consecutive quarter with positive net absorption. Class A asking rents increased to an average of $26.09 per square foot, a 3.4% year-over-year increase.
For more on Midtown’s tightening, and the intriguing questions that come from it, watch Toby Jorgensen’s video above. And for more detailed information on the overall Atlanta office market, click on the image below to download the Q1 MarketBeat report.