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News release


Vacancy Rates Remain High, but Activity in Atlanta’s Central Perimeter and North Fulton Markets is Steady

Jones Lang LaSalle launches inaugural Suburban Landscape Reviews

ATLANTA, August 31, 2010 — While office vacancy rates are hovering around 21 percent in both the Central Perimeter and North Fulton commercial real estate markets, leasing activity has held relatively steady in the first half of 2010 and both markets appear poised for recovery, say two new Suburban Landscape Review reports by Jones Lang LaSalle.

“Although both markets are seeing considerable interest from corporate office space users, tenant- favorable market conditions will remain in place until at least early 2011 and probably beyond,” said Jones Lang LaSalle’s Atlanta Market Director, Clark Gore.

Central Perimeter Overview

The Central Perimeter market has long been the location of choice for large corporate office users.  UPS, Cox Enterprises, Newell Rubbermaid, T-Mobile and others have all made Central Perimeter their home.  Smaller firms also benefit from its proximity to a large and educated workforce and executive housing in Dunwoody, Buckhead and Sandy Springs.  But Central Perimeter’s position at Georgia 400 and Interstate 285 as well as its access to MARTA have established it as a desirable market.

“In the first half of 2010, after six consecutive quarters of negative absorption, nearly 200,000 square feet of office space has been absorbed in Central Perimeter,” said Gore.  “If this pace continues for the rest of the year, it would record its strongest year since 2006.”

In the first half of the year tenants such, Hughes Telematics and Golden Key have committed to office leases in Central Perimeter and Global Payments, Nova Southeastern University and AMN Healthcare top a list of more than 600,000 square feet of active requirements in Central Perimeter.

Jones Lang LaSalle’s Central Perimeter Landscape Review notes that the highest rents in the market are commanded by high-rise and mid-rise buildings. High-rise building rents peaked at $26.79 per square foot in late 2007 and have since fallen by 9.3 percent to $24.31 per square foot.  The mid-rise market did not peak until a year later and, after falling only 4.4 percent to $23.49 per square foot, rents have already started to rebound to around the $23.56 per square foot mark.  Low-rise and corporate campus buildings have seen less fluctuation in rental rates over the past few years.

“Rents across the market are expected to bottom out late this year, but that will depend, of course, on sustained increases in demand,” said Gore.

North Fulton Market Overview

The North Fulton Landscape Review reports that North Fulton boasts a healthy mix of office tenants housed mainly in corporate campus and low-rise buildings.  Global companies like Philips and Verizon take advantage of a growing workforce and amenity base while being removed from the congestion of other urban markets of Atlanta.

Many North Fulton offices are customer service and call center locations that have been affected in recent years by downsizing and layoffs.  In the last 15 months, the North Fulton office market has given back 440,000 square feet of office space.

“Leasing volume has held steady at nearly 500,000 square feet leased per quarter,” said Jones Lang LaSalle’s Research Manager for Atlanta, Lanie Rea.  “Renewals and downsizings have dominated activity levels and have created some large contiguous blocks of space that have returned to market.”

Office leases in the first half of the year were led by The Coca-Cola Company, R*Works, Media Brokers International and Angelica, while Radiant, ACE Insurance and Xavient are some of the leading prospects in a pool of almost 800,000 square feet of current active requirements in North Fulton.

“Marginal increases in rents can be expected in the next few years as the market recovers but rents remain at very competitive rates,” said Rea.  “Average low-rise rents are $19.23 per square foot while corporate campus rates have reached $20.19 per square foot.  Prices in North Fulton will continue to be among the lowest in metro Atlanta’s major suburban markets.”
About the Landscape Reviews

Similar in style to our annual Urban Skyline Review, these two reports provide a written and graphical analysis of Central Perimeter and North Fulton, two of Atlanta’s largest suburban office markets.  The two Atlanta Suburban Landscape Reviews focus geographically on the GA 400 corridor and cover speculative Class A and B office buildings greater than 100,000 square feet.  In the fall of 2011, we plan to continue the suburban series with the release of the Northeast and Northwest submarket reports.

About Jones Lang LaSalle

Jones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2009 global revenue of $2.5 billion, Jones Lang LaSalle serves clients in 60 countries from 750 locations worldwide, including 180 corporate offices.  The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 1.6 billion square feet worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with approximately $38 billion of assets under management. For further information, visit our website,