Q1 Atlanta Retail Market Report
Market Overview
Currently, there is a 5% increase in overall employment in the Atlanta region compared to February 2020. The most substantial job expansion has been observed in office-related sectors such as finance, professional services, and technology. Atlanta continues to be an appealing market for corporate relocations in the long term. Microsoft is proceeding with its lease at Atlantic Station, and companies like Google, Cisco, Invesco, Micron, and Norfolk Southern have all established new offices in Midtown in recent years.
At the start of 2024, Atlanta’s retail sector experienced its lowest availability rate on record, approximately 200 basis points lower than the 10-year average, standing at 3.5%. Tenants are swiftly occupying available space, and due to limited new development, high occupancy rates, and increased retail sales, landlords maintain strong pricing leverage.
Market Performance
Atlanta’s retail sector has recorded positive absorption for 14 consecutive quarters, bouncing back swiftly after experiencing only two negative quarters in 2020. This market area ranks among the leading markets nationwide in terms of trailing 12-month net absorption. Rental rates have reached a new high of $22.00 per square foot, marking a 5.6% increase over the past year. This growth positions Atlanta as one of the leading large markets in the U.S. for rent growth. However, Atlanta remains one of the nation’s more reasonably priced large markets. Approximately 740,000 square feet of retail space is under construction, representing 0.2% of its current inventory. This aligns with the national average of 0.4% and is expected to decrease further in the short run, given the decline in construction starts observed in 2023 and Q1 2024.
Atlanta ranks among the top five markets in the U.S. in terms of 12-month retail property sales volume. The most significant transactions include grocery-anchored developments, community and neighborhood centers located in the outer suburbs, a regional mall, two Tesla dealerships, and a portfolio deal.
Atlanta By The Numbers | Past 12 Months | Source: CoStar Group
- Vacancy Rate: 3.5%
- Rent Growth: 5.6%
- Deliveries in SF: 1.8M
- Absorption in SF: 2M
- Sales Volume: $2.1B
