PricewaterhouseCoopers and the Urban Land Institute have ranked metro Atlanta the No. 13 commercial real estate market to watch in the nation, but noted the area's real estate sectors are soft. The ranking comes from the 29th annual industry outlook for the real estate and land use PricewaterhouseCoopers and ULI published Wednesday. The report noted the metro area has been on a "slight upswing" in recent years. But it described the area as "chronically overdeveloped," and it said Atlanta still has not approached its peak years of a decade ago around the 1996 Atlanta Olympics.
"Atlanta cannot get relief from building fever since the local economy feeds off growth and is on a continuous construction treadmill," the report said. "As a result, every commercial real estate sector is soft. New big-box industrial projects sit empty, too much office construction is underway and retail development actually exceeds that in other markets."
The report projects Buckhead and Midtown markets will become a new urban core served by MARTA. However, central downtown continues to languish, without any meaningful residential development, the report said. And it believes a new aquarium and the World of Coke attraction will not be adequate to revive the city's core.
PricewaterhouseCoopers and ULI also took notice of the metro multifamily building boom: "Outside of the core, high-rise apartments and condominiums are spouting up at seemingly every major intersection, drawing former suburbanites who no longer can tolerate some of the nation's worst commutes. The ease of building competitive units, however, makes it difficult to generate attractive returns."
Despite the negatives, the report lauds Atlanta as "the clear leader of the interior South," noting regional markets such as Charlotte, N.C.; Raleigh, N.C.; Birmingham, Ala.; and Nashville, Tenn.; cannot compete.
Ahead of Atlanta, PricewaterhouseCoopers and ULI ranked New York as the top real estate market, followed by Seattle, Washington, D.C., Los Angeles, San Francisco, Boston, San Diego, Denver, Phoenix, Houston, Miami, and Chicago. Behind Atlanta are Dallas-Fort Worth and Philadelphia.
Source: Atlanta Business Chronicle