Atlanta Shopping Centers Market Report
Market Overview
The Atlanta metro is still standing strong in its job growth and employment sector. Prominent employers
include office-using companies, as well as several transportation industries. Norfolk Southern, which moved its headquarters to Midtown Atlanta in 2021, is now expanding its presence here. The firm is slated to add around 850 new jobs, with each having an average salary of more than $100,000. Automation employers are also making a name for their companies here. SK Innovation, an international firm that focuses on electric vehicle battery production, recently acquired a facility in Commerce. This is located in the northern portion of the Atlanta metro, and will employ thousands upon completion.
Market Performance in Atlanta’s Shopping Centers
By the Numbers
- Vacancy Rate: 3.6%
- Rent Growth: 5.4%
- Deliveries in SF: 2M
- Absorption in SF: 1.3M
- Sales Volume: $2.4B
With the rapid amount of absorption in the metro, Atlanta has seen a rise in its asking rent. The current pace of rent is above the national average, but certain areas of the metro are seeing positive trends in rental rates. Areas outside of central Atlanta are marking greater growth as they boast less expensive rent rates compared to central locations. Fayette/Peachtree, located south of central Atlanta, noted one of the largest leases so far this year. B. Turner’s Clothing Co. leased out 36,000 square feet at Peachtree East Shopping Center, which is anchored by Publix. The clothing retailer notched a 10-year lease and is represented by Crossman & Company.
As the metro notes a low vacancy rate, the amount of units delivered or under construction have also remained at low levels. Atlanta is also forecast to mark the lowest amount of square footage delivered. However, areas in central Atlanta are leading the metro for units under construction. One example is a new Publix that is opening in Buckhead. The grocery retailer will take over 55,000 square feet that was a former Kroger, and is scheduled to open in December 2024. The area near this Publix will remain enticing for investors as there are plans to bring in new retailers and restaurants throughout the next few years.
Atlanta still maintains its rank among the top five markets for retail sales volume nationally. The largest transactions so far have included grocery-anchored properties, which often obtain cap rates in the high-5% to mid-6% range. Johns Creek Town Center, a multi-tenant property, noted the greatest transaction in 2Q24. It was sold for around $38.5 million, with an asking price of $169 per square foot. PetSmart is the anchor tenant for this facility, with Kohl’s occupying the most square footage here at 86,584 square feet.
