May 11, 2018
Demand for medical office space in Atlanta is so strong, the marketwide vacancy rate dropped to 9% in the first quarter—its lowest level since 2003, according to recent research from Transwestern. Muted development and robust absorption contributed to the decreased vacancy.
During the first quarter, nearly 200,000 square feet of new medical office space was completed. Another 548,191 square feet is under construction, and roughly two-thirds of this space is already leased. Meanwhile, absorption of medical office space totaled 372,377 square feet, nearly twice the amount absorbed in fourth quarter 2017, and more than half of 2017’s total.
Transwestern’s Steve Hall said, “Healthcare continues to be a growth engine for Atlanta’s economy. Increased leasing activity has pushed rents up by 3% year over year, and we foresee heightened investor interest in the market as a result.”
Medical office asking rates now average $23.10-per-squrare-foot, and the average sale price is at $374-per-square-foot, according to Transwestern.
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