By: David C. Smith, Vice President, Americas Head of Occupier Research
The economy continues to grow, as strong business fundamentals drive commercial real estate across the country. Just as companies fervently battle to attract much-needed talent, cities are engaged in their own battles to draw and retain companies. Cushman & Wakefield recently compared the 25 largest office markets in five factors that are vital to occupiers: economic growth, population makeup, transportation options, costs, and commercial real estate fundamentals.
As with many national comparisons, Atlanta ends up looking attractive when compared to the largest U.S. cities. Its gross metropolitan product (GMP) is the seventh largest in the country, and Atlanta is one of only six markets forecasted by Moody’s to expand by over 3% per-year-over the next five years. The other five markets are in the Southern half of the country — Dallas, Phoenix, and Charlotte — or on the West coast — Seattle and Oakland.
Atlanta has a fast-growing population with strong representation among younger and educated workers. One-fifth of Atlanta area residents are “millennials,” which is the sought after young worker demographic roughly aged in their mid-to-late 20s and early 30s. Additionally, with over 36% of the population possessing at least a bachelor’s degree, Atlanta outpaces the national average by over six percentage points (the national average is 30%).
Driven by strong economic and labor-pool growth and supported by lower costs of doing business, Atlanta continues to be a business-friendly environment. This has led to continued absorption of office space throughout the market. Atlanta is one of the more cost effective office markets among the largest U.S. cities. However, rents grew by almost 10% in Q1 2018 (year-over-year), which was the second highest increase among the 10 cheapest, large U.S. markets (all with rents below $26 as of Q1 2018).
For more insights into how Atlanta ranks among the 25 largest office markets, check out Cushman & Wakefield’s Location Lens map.
David Smith is Vice President, Americas Head of Occupier Research. He produces occupier thought leadership content for the Research Center of Excellence and directs a program of market presentations, written analysis, surveys, forecasts, and data collection that supports Global Occupier Services and the brokerage business, and advances the strategic plan in Americas Research.
Sources: Cushman & Wakefield Research; U.S. Bureau of Economic Analysis; Moody’s Analytics; U.S. Census Bureau