Atlanta’s downtown business actual property occupancy ranges remained steady throughout the second quarter of 2020 regardless of the pandemic that had many workplace employees telecommuting from house, in accordance with a brand new report by Colliers Worldwide.
“For the most part, downtown is managing pretty well,” mentioned Scott Amoson, senior vice chairman of director of analysis at Colliers’ Atlanta workplace. Though downtown workplace leasing slowed throughout the first two quarters, largely pushed by the pandemic, “That doesn’t mean the market is dead at all.”
Amoson mentioned he doesn’t count on loads of move-outs by way of the tip of the yr. He additionally mentioned there are a number of strikes within the works that will fill downtown workplace house by the tip of this yr or early subsequent yr and probably transfer the downtown market’s web absorption again in constructive territory.
Web absorption within the downtown workplace actual property market has been detrimental to date in 2020, pushed by Anthem’s long-planned transfer out of the 150,000 sq. toes within the Bank of America constructing to expanded digs in Midtown, Amoson mentioned. That transfer, which predated the pandemic, left Atlanta’s downtown workplace actual property market with the second-highest occupancy loss to date this yr though it was a considerable web enhance to the town’s total workplace actual property market, Amoson mentioned.
The downtown workplace emptiness price presently sits at 12.7%, up from 12.6% in Q1, in accordance with the report.
However he mentioned the forecast for the rest of 2020 stays considerably of a toss-up as a result of of an uptick in pandemic-driven subleases that Amoson mentioned “we are keeping an eye on” — a potential sign that these tenants may vacate the premises by the tip of the yr.
“We have definitely seen an increase [in subletting] since March,” he mentioned. “It could be a number of things — cost-cutting measures, whether some of these companies realize they can work efficiently with employees at home and don’t need that space anymore.” That development is market-wide, he mentioned.
“We don’t see any huge swings at all that would be unexpected,” he added. “I haven’t seen anything huge, especially downtown, that would be alarming to us.”
Amoson mentioned the downtown market’s web absorption will in all probability stay detrimental by way of the third quarter. “But there have been some pretty decent size leases done in the downtown market. Once they take occupancy late this year or early next year, we could be back to a positive gain.”
“For us in Atlanta, we will benefit more than we are going to be negatively impacted by the pandemic. … A lot of companies want to move to our location because of the talent we have here and the business climate.”