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2022 Atlanta Commercial Real Estate Forecast

By Bill Adams, MBA, CCIM, CRB, ALC

I have often said that my crystal ball is much clearer looking backward than forward. As we begin a new calendar year, I do feel like that 2022 will be another strong year for commercial real estate like 2021. Here are my predictions based on 40+ years of experience in the industry.

The Unknowns
The big unknowns are the latest COVID-19 variant and whether Omicron is the last of the pandemic or just the latest in a series of mutations. Interest rates and inflation fears are the other unknowns.

My cloudy crystal ball predicts that COVID-19 will transition from a pandemic and will become endemic. Much like the seasonal flu, we will get a “jab” once a year. Wearing a mask in public or when sick will continue to be a habit for many of us.

Interest rates will rise this year as the Federal Reserve tries to tamp down inflation. My guess is that the inflation rate will begin to moderate later in the year as life adjusts to the new normal. I believe that wages and housing costs will keep the rate of inflation above the 2% rate we have enjoyed prior to the pandemic.

Multifamily
Home mortgage rates are projected to rise and Atlanta has an influx of potential buyers, which will make single family homes less affordable and drive rents in multifamily properties. While supply chain issues plague developers, there were still 21,000 multifamily units under construction at the end of 2021. The Atlanta multifamily sector will enjoy another good year in 2022.

Industrial
The industrial market will continue to be strong as the city continues its role as the logistics hub for the Southeastern United States. Online shopping, a solid trend before the pandemic, will continue to drive the industrial market.

Office
Despite the rise of the work-from-home movement, my guess is that the office market will have a good year. Many firms have delayed moving employees back to work because of the Omicron variant, but once we are past Omicron, I think many employees will return to the office for at least three days a week, if not more. Especially employees who are newer to the company who are getting used to the company culture, as well as upper management.

I do think we’ll see some reduction in office space and more hoteling – where when you want to go to the office, you’ll have to reserve a desk. Overall though, the office market will continue to recover in 2022.

Retail
Based on my observations during the holidays, the retail market ought to be solid this year. The one exception I’m worried about in the retail market is the restaurant business, which is challenging with the cost of food and finding labor. E-commerce will continue to be a challenge for brick-and-mortar retailers and successful retail outlets will incorporate online shopping into their mix.

Atlanta continues to be an attractive place to live, work and play. Population growth coupled with corporate relocations like Norfolk Southern, Microsoft and Google bode well for the Atlanta commercial real estate market in 2022 and beyond.

 

Prefer to hear my update instead of reading it? Click here for my 2022 commercial real estate forecast video!

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About Us

• As a native Atlantan who grew up in a house built by my grandparents in 1902 across the street from Grant Park, I have always loved the City’s downtown and historic intown neighborhoods. I went to school from the first grade through graduate school in downtown Atlanta.

As a child growing up in the 1950s and 1960s, I witnessed and mourned the decline of those wonderful old “close-in” neighborhoods and their business districts. By the time I was in my early 20s in the late ’60s, I had gotten involved in early intown revitalization efforts in Grant Park under the auspices of a program known as “Model Cities.” After a tour of duty in the Army and Graduate Business School at Georgia State University, I joined the forerunner of the Grant Park Neighborhood Association in late 1974. In the early 1970s most intown neighborhoods were “redlined” by banks and neglected by the local government. The neighborhood revitalization movement in Atlanta was in its infancy. Banks refused to make real estate loans in these “high-risk” neighborhoods. The level of city services was poor and to make matters worse, the city had rezoned many of these neighborhoods from single-family to multifamily residential in the 1950s.

I became a neighborhood activist in Grant Park and, along with others, helped to bring about one of the largest “down zonings” in City history, converting the area back to single-family/duplex zoning from apartment zoning. I was also a community representative and later President of the local Neighborhood Housing Services program, which helped local lenders understand the housing market in the City’s neighborhoods and helped end their practice of not making loans in these communities. I later served as a neighborhood association and Neighborhood Planning Unit (NPU) Chair as well as a board member of the civic groups working to restore the Cyclorama in Grant Park and historic Oakland Cemetery.

All these experiences have had a profound effect on me and the company that I founded in 1979. I had a commercial real estate background but came to realize that strong neighborhoods are vital to a city’s quality of life and its commercial core. Adams Commercial’s approach to real estate has always reflected the values of neighborhood activism. Our transactions involve people, not just numbers. We are in the problem solving and information business. After more than 40 years of service, our goal is to complete our client’s purchase or investment while at the same time adding value to the community through that transaction.

I hope that you find our website to be a helpful tool whether you are planning to buy, sell or are trying to get a good feel for the state of the commercial real estate market in Atlanta. If you have any questions or comments, please e-mail me at wtadams@adamscre.com. If you have an interest in commercial real estate, please visit our Adams Commercial Real Estate Website at adamscre.com.

Thanks,

Bill Adams, MBA, CCIM, ALC, CRB
President
ADAMS COMMERCIAL REAL ESTATE
Atlanta, GA

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At Adams Commercial we define SUCCESS when our clients get up from their closing with a smile. To accomplish this,  we start by putting the needs of our clients first, which to us is the essence of INTEGRITY. We bring the collective WISDOM of our agents to every real estate deal … wisdom that comes only from the company’s years of business experience and expertise in intown markets. Whether it is showing up at the appointed time or making sure all details are noted and deadlines met, we believe DEPENDABILITY is also an essential ingredient of a successful real estate transaction. We believe that your successful purchase or sale adds value to COMMUNITY. And we are proud to play a role in building and sustaining a thriving community.

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