| Suburban office buildings in Atlanta appear to be the odd man out, but in this instance that's not a bad thing, says Reis Analyst Brad Doremus. On the national stage, they exhibit vacancy rates 420 bps above CBD buildings. In Atlanta, however, suburban offices were20.7% vacant as of Q4 2010, compared to the 22.3% vacancy rate in the metro's CBD offices. The prevalence of higher vacancies for CBD buildings has been ongoing since early 2005 and also existed prior to 2000. Yet the current spread between CBD and suburban vacancies is at its lowest point since Q4 2005. The spread climbed to 780 bps in Q3 2008, but has steadily dropped as the suburban vacancy rate has surged upwards. From a cyclical trough of 14.4% in Q4 2007, suburban rates have skyrocketed by 630 bps. In contrast, the Atlanta CBD vacancy rate increased by just 260 bps from the 19.7% trough in Q1 2008. |
SUBURBAN OFFICE FAIRING BETTER
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Brad Doremus
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