The events of 2020 have quickly put a stop to the longest running economic expansion in United States history. First, the world was seemingly caught off guard by the quick spread of the coronavirus bringing global economies to a screeching halt. Then, the death of George Floyd in Minneapolis on May 25th during an incident with police captured in a viral video triggered mass protests and riots across all major US cities. On Friday, May 29th, Georgia Governor Brian Kemp declared a state of emergency in Fulton   County as the protest in Atlanta turned violent and destructive calling in the Georgia National Guard to protect people and property.  

Obviously the combined effects of all of these events – the pandemic, the economic crisis, and the mass protests and riots – will have long lasting implications to the social and economic fabric of our country as well as the metro-Atlanta area. Here we look to examine the current state of the commercial real estate market in metro- Atlanta and project how the latest events will affect the market going forward.      

Metro-Atlanta lost almost 300,000 jobs during March and April wiping out 5 years of employment growth. The immediate impact to the Atlanta commercial real estate industry has been a significant reduction to the number of leases signed and properties sold accompanied by a reduction in commercial real estate lending activity. Even so, Atlanta has fared better than many other US cities in part because of its lack of reliance on tourism dollars and its strong position in the industrial and distribution sectors. 


The last decade of economic growth was particularly strong for Atlanta’s office market. The metro area added approximately 200,000 office-using jobs since 2010, sustaining solid demand for office space. Midtown Atlanta led the way with its fast-growing technology sector. North Fulton and Forsyth also experienced a strong increase in demand over the last decade. Companies remain bullish on Atlanta’s long term outlook due to its highly educated workforce and relative affordability.    

There has been mixed news recently for the Atlanta office market. Microsoft plans to open an artificial intelligence and cloud services technology hub next year at Atlantic Station that would create 1,500 high-tech jobs in Atlanta. Leasing 523,000 square feet at Atlantic Yards, Microsoft is reportedly investing $75 million in the new mixed-use facility that will include retail space that is open to the public. 

“We are excited that a global leader like Microsoft Corp. is expanding its investment in

Georgia with tech jobs that will be truly beneficial to the company and our state,” Governor Kemp stated in a press release. “I am confident that our top-notch tech talent and education pipeline will continue to be an asset to Microsoft.”

However, less than a week after Microsoft announced its plans for Atlantic Yards, Macy’s lowered the optimism stating that the pandemic has caused it to abandon plans for a center of its own across the street from the planned Microsoft offices.

“The COVID-19 pandemic has taken a toll on the Macy’s Inc. business. As a result, we have decided not to occupy the T3 West Midtown building in Atlanta,” Macy’s spokeswoman Andrea Schwartz said in an email. “We have notified the Georgia Department of Economic Development that we will not proceed on our application for economic support in connection with the T3 facility.” 

David Kahn stated this was the first tenant to back out of a major office lease in Atlanta since the start of the pandemic. “The loss of 600 high-paying new jobs and 100,000 square feet of office is a blow to Midtown, but the recent Microsoft deal highlights that fortune 500 firms continue to look to Midtown for their technology and software development operations,” Khan said.


The most recent data shows the bigger picture of the coronavirus impact on metro Atlanta’s retail sector. Layoffs and furloughs are significant in the region and consumer spending is far below pre-coronavirus levels. The pandemic has hit retailers and restaurants especially hard with many businesses closing their doors for two months. Even with Gov. Kemp’s aggressive reopening schedule, the limited retail demand is doing damage to businesses that could cause rents to fall drastically in the coming months. 

A slow recovery or a second-wave of the virus could change the landscape of the US retail market permanently. 

“Hundreds of retail stores were in some form of distress but were financially viable,” said Mark Cohen, the director of retail studies at Columbia University in New York. “Now they’ve been all closed for months, and it’s anybody’s guess what might become of retail space.”

Store closures are expected to number in the tens of thousands this year amounting to an estimated 70 million square feet of retail space. Raya Sokolyanska, a senior analyst Moody’s Investors Service, said to investors, “Apparel and footwear retailers are undergoing a sector-wide shock that will push weak players into default and reverberate into 2021.”

Adding that “for most apparel retailers, liquidity management will remain a key focus after stores reopen, as they contend with clearing inventory and weak consumer demand.”

Sokolyanska projects that even a potential recovery in 2021 will be 15% to 35% below pre-coronavirus levels. She predicts “the crisis will push stressed retailers into default

and challenge the rest.” Investors with deep pockets will eventually see opportunity as coronavirus accelerates changes in consumer spending behavior likely resulting in liquidations and store closings. 

Landlords and private-equity groups have amassed multibillion-dollar war chests to swoop in on opportunities created by financial distress. For example, Apollo Global Management plans to stockpile $20 billion in order to scoop up distressed properties.

Brookfield Asset Management has $5 billion in a “revitalization program” to help ailing retailers and $60 billion “ready to be deployed globally as opportunities arise,” according to CEO Bruce Flatt. “In reflecting on what really matters to our business, it is liquidity, liquidity and liquidity, in that order,” he said in a letter to shareholders.

Another firm, Blackstone Real Estate Income Trust, has $3 billion at the ready. “We’re also starting to see some rescue situations, although distress takes time to play out,” Blackstone Group President Jon Gray said. “The next thing you’ll see is some rescue capital needs, and we’ll start to address some of that. People will run through their reserves, then you’ll begin to see assets trade.”

Stores already going into bankruptcy include Pier 1, J.C. Penney, Neiman Marcus, and J. Crew. Moody’s analyst Raya Sokolyanskan anticipates that after the recession companies with differentiated brands, strong balance sheets and well-developed e-commerce businesses will take the market share left behind by the numerous companies that could not survive.


The industrial market in metro-Atlanta was boosted with the news of two large acquisitions.

Summit Real Estate of St. Louis paid $33.5 million for Creekside Distribution Center, a 538,500-square-foot building in East Point, Georgia, less than 4 miles from Hartsfield-Jackson Atlanta International Airport. The acquisition is Summit Real Estate’s eighth in the Atlanta market since 2014.  

Transwestern Investment Group, a Texas firm, said Monday it bought Bohannon Logistics Center Fairburn, Georgia, a newly constructed industrial building it expects to lease to companies seeking logistics space near Hartsfield-Jackson Atlanta International Airport.

“The acquisition of Bohannon Logistics Center provides the opportunity to take advantage of critical demand drivers in the Interstate 85 South submarket,” Transwestern Vice President Wes Davidson said in a press release. “The asset’s proximity to Hartsfield-Jackson airport, CSX Intermodal Terminal and Interstates 85 and 285 position it to attract a variety of industrial and logistics users.”

The Hartsfield Airport-North Clayton market is among the best-performing industrial sectors in the region, although momentum has slowed over recent quarters and overall vacancy has increased.

“The airport-North Clayton submarket continues to lead the Atlanta metro with a strong leasing environment and a massive construction pipeline,” CoStar managing analyst David Kahn and market analyst Trenton Turner wrote in a report “However, speculative deliveries are starting to impact the submarket, and vacancies have shot up in recent months. With roughly 6.2 million square feet underway and a large portion of that speculative, vacancies are likely to continue to rise in the coming quarters.”


Despite soaring unemployment the multifamily market in Atlanta appears to be somewhat stabilizing. Rents have steadied over the most recent weeks after a short period of decline. Most U.S. apartment renters continue to pay on time and there appears hope for the long-term future of metro Atlanta’s office market with the Microsoft expansion adding to the abundance of tech firms gravitating to the city’s booming Midtown district.

Nevertheless, extensive job losses will continue to impact housing demand in Atlanta for the next few months. Rising vacancies will be the norm until the job situation recovers and there are signs that the rent collection rates may not be sustainable. Particularly, renters in the most vulnerable positions in cheaper and older apartments are starting to have problems paying on time.

However, despite the coronavirus pandemic causing a slowdown in economic activity, Metro Atlanta’s structural advantages will continue to give the region an edge over peer markets. Atlanta, with its key distribution location and highly educated workforce, will likely remain a premier destination for attracting new office jobs, driving demand for the multifamily sector.

Nationally, anticipation is building that there may be a long term shift away from urban centers and into suburbs and smaller cities. These last few weeks have shown the possibility of many office jobs shifting to work from home positions. If the working from home trend continues, living in a luxury apartment in a major city near a corporate office may no longer be a necessity. An affordable suburban home provides more space for a home office and may be seen to be a more appealing alternative if there’s no commute required into the city.


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Whether you’re looking to lease, buy or sell commercial property, now is still the time to do it in Atlanta. The Meridian Real Estate Group has been assisting commercial clients for well over a decade and would love the privilege of earning your business. Our goal is not just to help our clients with a transaction, but to support the building of financial legacies through real estate. Call us today at 678-631-1723 or visit us online at We look forward to serving you.

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