The retail sector in the Atlanta market has had a huge impact due to the COVID pandemic. The charts below highlight a few key performance indicators of the retail real estate in Atlanta. Most malls and shopping centers have seen a decrease in business and many tenants have been unable to pay month’s rent. Compared to a year ago the inventory square footage has increased along with vacancy rates, while the amount of buildings under construction decreases. There has not been much development of properties therefore, the vacancy rate is largely due to move outs. However, the rent price per square foot has been increasing as there is also an increase of population moving into Atlanta. The population growth of Atlanta is at 1.3%, one of the top in the country, while rent growth by market is in the top ten at 3.6%.
There has been a significant drop on the demand for retail space due to the COVID pandemic. The silver lining is that since there hasn’t been any major construction projects and groundbreakings have slowed, there is not much pressure on the supply side of retail space. Since the first quarter of 2019 to the current quarter of 2020, there has shown to be a decrease in net absorption. This highlights that more real estate was vacated rather than absorbed which typically leads to a drop in rent prices. The charts below visualize this relationship in the time between the first and second quarter of 2020. The retail sales volume is shown to have decreased in recent months as the pandemic decreased spending in general. The market cap rate has remained steady in Atlanta at 7.7%, above the national average of 7.2%.
All data from CoStar Group