Q2 2025 Atlanta Retail Market Report
Highlights
- Atlanta’s retail availability rate remains at just 4.1%, outperforming the 10-year average of 5.5%, reflecting tight market fundamentals and strong occupancy.
- Anchor and junior anchor spaces in high-performing areas continue to see strong tenant demand, driving rapid absorption—even in the wake of recent retail bankruptcies.
- The retail sector remains one of the most affordable and attractive markets for retail expansion, as asking rents hit a record high of over $23/SF, growing 4.5% year-over-year, outpacing the national average.
By the Numbers
- Sales Volume: $640M
- Cap Rate: 7.1%
- Market Sale Price Per SF: $222
- Vacancy Rate: 4.1%
- Rent Growth: 4.5%
- Market Asking Rent Per SF: $23.29
- SF Under Construction: 616K
- SF Absorbed: 114K
- SF Delivered: (500K) | Q2 2025 | Source: CoStar Group
Demographics
- Unemployment: 3.4%
- Current Population: 6,439,210
- Households: 2,402,197
- Median Household Income: $90,881
Market Performance
The Southeast metro’s retail market continues to emulate durability, anchored by demographic trends outpacing national averages—particularly in population and income growth. While recent quarters have posted negative net absorption, totaling -1.5 million square feet over the past 12 months, tapered deliveries have allowed the market to rely on tenant demand uptake, keeping fundamentals stable and the market afloat. Only 1.2 million square feet of retail space was delivered, and just 550,000 square feet is currently under construction, with the majority preleased or build-to-suit.
Leasing volume is down 30% from its 2021 peak, but high-quality space is not lasting long on the market, with particular interest from expanding grocers, restaurants, and service-based tenants, limiting well-located availability throughout the sector. Investments remain competitive, as pricing has held firm in core submarkets. Grocery-anchored assets and suburban portfolios continue to lead transaction activity, and with interest rates easing, deal volume has returned to its 10-year average.
Market Asking Rent Per SF and Vacancy Rate
Source: CoStar Group
Under Construction
Atlanta has minimal retail construction, just 0.1%, with most space pre-leased to QSRs and gas stations like Chick-fil-A. The available space primarily consists of multi-tenant projects targeting smaller, local businesses. Recent deliveries include a 125K SF Kroger, 78K SF Kia dealership, and 150K SF leased retail at Dunwoody’s High Street. Carter’s Summerhill project added a Publix-anchored center and leased buildings, highlighting tenant-driven construction in Sun Belt cities.
Sales
Retail investment surged in Atlanta in 2024, surpassing 2023 and pre-pandemic averages despite national market slowdowns. This performance put Atlanta firmly on the radar of national investors, cementing its status as a Sunbelt hotspot.
Notable transactions included the 335,000 SF Cobb Place Center, which sold for $64 million at 99% occupancy and an 8% cap rate, underscoring strong demand for stabilized, multi-anchored centers. Kedron Village, a Kroger-anchored suburban center, traded at $250/SF, reaffirming investor appetite for grocery-anchored product. Urban investment activity accelerated, led by the $450 million planned redevelopment of Mall West End, along with landmark trades like Plaza on Ponce and Morningside Village, which fetched nearly $700/SF in trendy in-town neighborhoods.
While annual rent growth remains above the national average, it is expected to decelerate to around 2% by mid-2025. Elevated interest rates and continued policy uncertainty may moderate transaction volume in the latter half of the year.
Sales Volume and Market Sale Price Per SF
Source: CoStar Group
12-Month Market Leaders: Top 10 Performing Submarkets
