Build Parking and They Will Come

Commercial Real Estate (“CRE”) fundamentals in Atlanta have been a hard sell for the last twenty-five years. Average rents for Office buildings in Atlanta have only increased by $1.88 per square foot—less than the rate of inflation1 —while average industrial rents have increased by only $0.70 per square foot. This phenomenon has a simple explanation: low construction costs, cheap land, and rapid arterial highway construction incentivized an “outward,” low-density growth model. Developers would buy cheap land one exit out, build brand new buildings, and scalp existing tenants by offering new construction at identical rental rates to preexisting product. This dynamic seemed as though it would continue indefinitely.

Published: Jan 19 | 2018 Download