sunset view of commercial real estate georgia downtown atlanta office buildings framed by a dramatic orange and pink hued sky with medium density town house residences in the foreground

Georgia is the 11th fastest-growing US state in terms of population, and also ranks high in GDP growth. The state's capital city, Atlanta, is the economic powerhouse of the South, being home to more than 150,000 businesses and to a thriving startup scene.

Georgia has been listed as the best US state for business for nine years in a row, getting top marks in corporate tax and regulatory environment, cost of doing business, competitiveness, workforce development, and access to funding.

The state's economy has shown an exceptional ability to adapt to changing environments and to encourage commercial activity in a variety of industry sectors. Top industries in Georgia include:

More than 1 million businesses sustain the state's entrepreneurial scene, while at the same time providing employment to over 40% of Georgia's workforce. That's in addition to more than 50 Fortune 500 and Fortune 1000 companies and to the state's long list of successful startups, such as BitPay, Calendly, One Trust, and Lending Point.

Office Market in Georgia

Office Space in Atlanta

Atlanta is home to the largest office market in the state, with a total inventory of nearly 165 million square feet, approximately 70% of which corresponds to Class A space.

Office space in the city is in high demand due to the large number of corporate headquarters already based here or looking to relocate. The biggest and most active sub-markets are Midtown and Buckhead in central Atlanta, as well as Central Perimeter, North Fulton and Cumberland / Galleria in the suburbs.

The latest data show evidence of a very active market with a full pipeline of new developments, currently at the highest level it has been since 2001.

Investment sales volume is returning to pre-2020 levels, and is mainly driven by interest in trophy office buildings in the most central downtown locations.

Vacancy rates average 20% for all asset classes, ranging from lows of 15% in Decatur to more than 40% in Douglasville.

Asking rents for Class A offices in urban Atlanta average $38 / psf, and $30 for Class B. Outside of downtown Atlanta, average rental costs are lower at $32 and $22 / psf respectively. Prices are rising fast in Central Perimeter, Decatur, Cumberland / Galleria and northwest Atlanta.

Sublease rates are approximately 25% below the direct lease rate.

Office Space in Savannah

Savannah is the third largest metro area in Georgia, and has a sizable banking, insurance and financial services sector that drives significant activity in the local office market. This is a small market with a total inventory of 4 million square feet, and most office buildings are in Southside and Westside.

Healthy indicators are present across the metro area: average vacancy rates have dropped below 10% or even lower in Savannah's CBD, and average asking rents stand at $22 / psf for all asset classes and $26 for Class A offices, going up to $30 in some Midtown locations.

Despite some office-to-residential conversions in the CBD, the market is expected to sustain moderate growth in the near future.

Retail & Industrial Market in Georgia

Strong recovery indicators are the key theme in Atlanta's retail property market. Vacancy rates average 4%, a figure that breaks 20-year averages. As for rental values, they're on an upward trend and average $19 / psf city-wide.

In the industrial market, robust activity is the main characteristic. There's strong interest in spec and build-to-suit projects, which have pre-lease rates above 70%. New developments are much needed to satisfy pent-up demand that is beginning to build up, following delays in delivery dates caused by supply chain issues.

Vacancy rates average 4% for warehouse and distribution space, and 3% for manufacturing.

Rental values for industrial properties are experiencing double-digit annual growth rates, exceeding $5 / psf for both direct leases and subleases. Atlanta's industrial market isn't just landlord-oriented; it's also favorable to tenants, as concessions are rising and flexible deals aren't hard to come by.

In Savannah, a large container port and a strong logistics sector, along with established distribution and manufacturing companies, are behind the stellar performance of the city's industrial market.

Total inventory is approximately 92 million square feet, with large concentrations of industrial space in Crossroads, Dean Forest, and the Port Corridor.

Vacancy rates are at record-low levels just above 0.6%, and millions of square feet in new developments are absorbed quickly - that also applies to speculative space.

Average asking rents for all industrial asset types are $6 / psf, and are likely to continue increasing in line with previous years' trends.

Tax Breaks, Incentives and Business Support

Several incentive schemes are in place throughout Georgia with the objective of strengthening the state's economy and its competitiveness. Business owners based in Georgia have access to several incentive programs, including:

- The Quality Jobs tax credit, which offers financial rewards for creation of high paying jobs.

- The Georgia job tax credit, which can be enhanced with further payroll deductions in certain counties.

- Tax incentives for certain manufacturing companies and for those running qualifying import-export operations through the Port of Savannah.

- Georgia's R&D tax credits, which can offset corporate tax and payroll liabilities.

- Additional incentives exist for manufacturers, telecommunications, film and entertainment, and companies investing in the development of rural areas.

More details are available from Georgia's Community and Economic Development website.