Atlanta Sublease Availability Hits Highest Point In A Decade
Office users in Atlanta have placed more space on the market than at any point in the last decade, and they are approaching the record of nearly 6M SF set during the Great Recession.
As of September, 4.7M SF of office space is available for sublease in Metro Atlanta, up nearly 1M SF since June, according to CBRE.
That rapid increase coincides with companies starting to reassess their office space needs as they permit employees to work from home during the coronavirus pandemic.
Some big names have begun to offer their excess office space in Atlanta, including Flexport and Macy's, which decided it won't occupy the space it had leased in Midtown for a new IT center, according to Colliers.
Most recently, Thyssenkrupp Elevators announced that it was planning to use less of its leased headquarters space before it even moves in, although the company has not officially offered the unused portion to the sublease market as of yet.
But for now, Doyle said the supply has not impacted rents. In a healthy office market, Atlanta's sublease rate generally hovers between 2.8M SF and 3.5M SF. Once that supply tops 5M SF, it starts to affect the overall office market, including direct leasing activity and the rental rates landlords can fetch for prime space.
Transwestern Vice President Max Mandelis said despite the rise in sublease space, she is not seeing companies cull their headcounts.
“My office clients just seem to be steady,” Mandelis said. “My client base hasn't had much change. Most of them are working from home.”