Atlanta Retail Market Report

Small-format constraints meet big-box challenges. Despite steady local retail sales and population growth, net absorption was negative in seven of the past eight quarters, with weakness concentrated in spaces above 20,000 square feet. While leasing activity has moderated across the market in the 12 months ended June, the slowdown has been most pronounced among spaces below 10,000 square feet. Still, fundamentals in this segment remain tight. Limited new supply should help keep small-format vacancy below 3 percent through year-end. Big-box vacancy, meanwhile, will likely approach 6 percent as the market continues to grapple with space shed through retailer closures.