Three office trends for next year: Continued large companies coming here. Demands for affordability. And new office landlord leasing dynamics including business ecosystems that help create value/profits.
That’s what Bruce Ford envisions. He is Transwestern’s president for the Southeast region based here, overseeing all the firm’s business lines. He is also responsible for Transwestern’s regional operations, overseeing the day-to-day management, financial planning, and marketing of the firm’s Southeast offices including Atlanta, Miami, Orlando and Nashville.
The first trend: “Going into 2019, Atlanta will continue to see significant companies making long-term investments in Atlanta,” he tells GlobeSt.com. Recent major moves here included Norfolk-Southern moving its Virginia headquarters to anchor a Midtown office project. Capital One is also looking to open a new tech office here and others are expected next year.
Rents at times reaching astronomical levels
The second trend: With asking rents rising and reaching new records in every Atlanta submarket, tenants are more inclined to look for less costly options.
“Therefore, users are looking for affordable space first, of course, in the most desirable neighborhoods. Vacancy has plummeted in urban Class B properties, with Midtown Class B space at just 4.3% vacant, and Buckhead close behind at 7.3%,” he says.
The third trend: He says to expect a continuation of changing dynamics next year. “There has been a greater emphasis on efficiency with businesses consolidating and putting more workers into less space. Also, the rise of alternative workspaces, including coworking space and the uptick in leasing at nontraditional buildings, has impacted the market. Both trends present opportunities such as helping companies become more efficient or providing the kind of curated office experience that makes workers want to come to an office.”
Creating tenant value
Landlords are starting to view their buildings as business ecosystems that create specific value for tenants. “Instead of filling free space with just any company with office needs, they are seeking and recruiting tenants with synergistic attributes to those already occupying the building,” he says.
The ultimate goal is to go beyond offering a place to sit and do work but to positively affect tenants’ profit margins.