John O’Neill, Managing Principal of Cushman & Wakefield’s Atlanta office, provided a commercial real estate market overview this afternoon at the Rotary Club of Buckhead luncheon. He began with an overview of the market, sharing the “Significant Six” factors making Atlanta a winning city that’s poised for success, which include: Hartsfield-Jackson International Airport, the Port of Savannah, a strong industrial sector, the large presence of Fortune 500 companies, the city’s more than 66 colleges and universities, and the relatively low cost of living compared to other big cities. O’Neill also touched on growth, with the city projected to continue to gain a lion’s share of large companies that are relocating and expanding, which should drive population growth to 6 million by 2020.
He then shared some statistics around three commercial real estate sectors – multifamily, industrial and office – that are experiencing a large amount of development in Atlanta. Though the multifamily sector has recently delivered 20,000+ units and has another 16,000+ under construction, there is job growth to support all of the inventory coming online, he said. Interestingly, recent deliveries have been about even in the urban core (9,950 units) and the suburbs (10,754 units). The industrial market has been booming, and recently delivered 28.7 million square feet with another 14.8 million under construction. Office development has been slower, with only 716,000 square feet under construction, but 4.4 million square feet underway – the highest number since the first quarter of 2008. Of this, approximately 40 percent is pre-leased.
Atlanta has several large initiatives in the pipeline, such as infrastructure improvements and trail development, and the city is headed in the right direction with transportation after passing the transportation funding referenda in November of last year – all signs of a bright future for the commercial real estate market as well as the city.