GlobeSt.com has published a three-part Q&A with JLL’s Atlanta Market Director Mike Sivewright. The wide-ranging interview explores the health of all the commercial real estate sectors in Atlanta and also details the overall state of the metro Atlanta economy.
Below are a few key excerpts:
GlobeSt.com: Let’s take a deeper look at Atlanta’s recovering office market. Are we still recovering or is the market actually growing now?
Sivewright: I would argue that Atlanta’s office market has moved out of its recovery phase and is firmly in an expansionary one. We lost about 66,000 office-using jobs during the recession, but we’ve gained all of those back—plus another 57,000.
You can really get a sense of the rising demand—which is being fueled by firms in the professional and business services, financial, and technology industries—by looking at rent appreciation. Atlanta is not known for noticeable rent growth, but the metro area saw its average class A asking rent spike by 5.2% in 2014.
GlobeSt.com: The multifamily sector continues to shine, and developers across the nation have responded by building new product. In Atlanta, are there any concerns about overbuilding?
Sivewright: We feel good about the demand/supply balance in Atlanta, and are optimistic that the metro area won’t become overbuilt any time soon. Sure, the pace of apartment construction has picked up, but Atlanta is a young, vibrant and growing city, and is attracting a lot of Millennials—the primary users of multifamily space. In fact, Georgia has the fourth-youngest population in the United States. Add it all up, and we still think there’s opportunity to add more supply.
GlobeSt.com: As for investment sales, what kinds of properties in Atlanta are drawing the most attention from investors, and do you see that changing over the course of the next 12 months?
Sivewright: Multifamily assets continue to lead the way from a volume standpoint, and we’re seeing record pricing for Class A office properties. The assets that are trading either have experienced strong rent growth or have strong repositioning potential.
As the economy matures, investor interest will broaden in terms of assets and geography. As for the year ahead, we could see increased buyer demand in Atlanta for class B industrial properties as well as hotels.
Click on the links below to read the complete interview: