Atlanta’s Office Market May Have Dodged The Worst of COVID-19’s Impact
The fallout from the COVID-19 pandemic has not been nearly as bad as it could have been, overall, for the Atlanta office market, according to what the numbers and long-term trends suggest.
“So far, so good for the Atlanta office market, in terms of weathering the storm that is COVID-19,” according to a Colliers International office market report released at the end of the second quarter. “Leasing activity is substantially off from this time last year; however, key transactions are still being completed. Projected absorption levels in Q3 look promising, though a large uptick in subleases could affect overall occupancy levels through the end of the year.”
While the market has certainly felt the effects of the pandemic — overall leasing activity is down 80.8 percent compared to this time last year, according to Cushman & Wakefield — Atlanta’s diverse industry portfolio still likely saved it from complete destruction.
“We didn’t really see any transactions take place over the first two months as COVID-19 started to evolve, but then, we noticed that it wasn’t as detrimental to leasing activity in Atlanta as we expected,” said Scott Amoson, a vice president and director of research for Colliers International in Atlanta. “Deals that were already in the works got completed. For new leasing activity, we have seen some pullback. We’ve seen some deals, but not to the level we usually see over the course of a few quarters.
“I’d say leasing levels are probably down about 50 percent compared to this time last year,” he added. “But, overall, I think we’re still in a good place in terms of attracting new companies to the market and seeing deals done.”
That has brokers and analysts optimistic.
“I think Atlanta is well-poised for recovery, especially compared to other major metros,” said Christa DiLalo, director of research for the Southeast region at Cushman & Wakefield. “This market has become a viable option for corporate headquarters and hubs. We have a very deep talent pool, and the presence of schools like Georgia Tech right in the heart of the city is a really big draw for companies seeking young, fresh talent. Atlanta is also a notoriously auto-based city, which puts us in a really good position compared to other major metros. So, this is an opportunity for Atlanta to emerge as the new [hot] market.”