Below are two graphs showing the vacancy rates and vacant square feet for retail spaces in Fulton County. Fulton County encompasses a wide area, including downtown Atlanta. I have included a graph with vacant square feet as well as vacancy rates because I think it gives a more holistic view of what is really happening in this area. When I hear that there is a “15% vacancy rate,” that doesn’t really mean much to me unless I have the total number of square feet available and then do math to figure out how many square feet are vacant. Instead of doing that, I decided to provide the vacant square feet as well as vacancy rates, just to give a full picture.
Though the vacancy rates in Fulton County retail space have been steadily increasing since early 2016, they are still lower than the peak vacancy rate over the past 20 years. This peak occurred in 2010. It is likely that this drastic increase in vacancies was related to the 2008 financial crisis. Like I’ve said before, the affects of recessions and crises like these tend to have a delayed hit to real estate trends. This could explain why the peak for retail vacancies was a few years after the crisis in 2008. Though it is likely that the vacancy rates are increasing due to retail spaces not being able to recover from the mandatory closures, the vacancy rates were increasing before Coronavirus hit. It will be important to continue looking at these rates in the future to gather the true impact of this pandemic on retail spaces.
In addition to analyzing the vacancy rate of all retail properties, I thought it would be interesting to look at the sublet vacancy rates over the past 20 years. The vacancies for sublets are very low, never exceeding 2.25%. The 2020 sublet vacancy rate is also very low compared to during the beginning of the century and around the 2008 financial crisis. The rate has increased since the beginning of 2020, but by less than .15%. It’s not likely that the pandemic has caused this increase since the rate has been slowly increasing since the beginning of 2017. It will be interesting to continue watching these rates to see if they increase more after the pandemic is over.
All data from CoStar Group