Atlanta’s retail market is proving it knows how to adapt, evolve and outperform, even in the face of macroeconomic headwinds. Despite a moderation in leasing and investment sales activity in recent quarters, the city’s fundamentals remain strong. Vacancy rates are at historic lows, rent growth is outpacing the national average and population and income growth continue to fuel long-term demand.
Demand and demographics
With vacancy rates consistently under 4 percent, Atlanta remains one of the tightest retail markets in the country. The appetite for well-located retail space hasn’t waned, even as broader economic uncertainty has slowed transaction velocity. In fact, strong absorption numbers and a limited supply pipeline have bolstered landlord confidence and pricing power across the metro.
What’s driving this resilience? A booming population, rising household incomes and a steady influx of corporate relocations. Employers like Microsoft, Google and Cisco are expanding their footprints, bringing with them jobs, workers and spending power. Some of this growth has been particularly noticeable in Midtown.
Redevelopment playbook
Instead of ground-up development, Atlanta’s growth strategy has increasingly focused on reinventing aging retail centers in prime locations. With construction costs high and land increasingly scarce, developers opt to reimagine what already exists. These projects often include mixed-use components (residential, retail and occasionally office), creating walkable environments that meet the evolving preferences of consumers and tenants.
Examples include the revitalization of Cambridge Square in Brookhaven, where Regency Centers is enhancing an existing grocery-anchored center, and new residential projects like Modera Parkside and Rambler Atlanta in Midtown, which include ground-floor retail designed to serve dense, urban populations.
Investors adapt to new rates
Retail investment sales in Atlanta experienced a notable dip in 2023, with volume declining over 40 percent in the first half of the year. This drop, primarily driven by higher borrowing costs, pushed many deals to the sidelines. However, the market has begun to stabilize, with sales volume rebounding to $2.2 billion in 2024.
Investor strategies have shifted accordingly. Institutional and international buyers have focused on portfolio acquisitions and sale-leasebacks, while regional players are targeting necessity-based retail assets such as grocery-anchored centers, strip centers and community shopping hubs. Redevelopment is also a recurring theme as investors look to reposition properties in line with current demand.
Cap rates have ticked up by over 40 basis points in some segments, reflecting the higher interest rate environment. However, buyer interest remains intact, especially for assets in high-growth areas.
Urban core, suburban surge
The premium submarkets of Buckhead and Midtown continue to command top dollar, with average rents exceeding $30 per square foot and premium spaces surpassing $40. High-income demographics, dense populations and substantial daytime traffic keep these areas top-of-mind for retailers.
Beyond the urban core, submarkets such as North Fulton, Brookhaven and Airport/South Atlanta are seeing robust development activity and rising rental rates driven by population migration and limited new supply. The emergence of large-scale, mixed-use developments like Aubrey Village in Bartow County points to the continued expansion of retail into Atlanta’s growing outer-ring suburbs.
Retailers lean in
Atlanta’s appeal extends beyond developers and investors — retailers are actively expanding across the metro. As of mid-2023, over 70 percent of under-construction retail space was preleased, highlighting the market’s constrained supply and strong tenant demand.
National and local players alike are making strategic bets. E-commerce giant Wayfair will open a 150,000-square-foot physical store in Upper Westside in 2026. Boutique concepts and community-driven retail, such as Market 166 in East Point and Rails in Buckhead Village, further evidence the market’s breadth and appeal.
Looking ahead
The outlook for Atlanta’s retail market remains fundamentally optimistic. Strong demographic trends, limited new supply and a strategic shift toward mixed-use redevelopment are likely to sustain momentum in the coming years. That said, ongoing uncertainty around consumer spending, inflation and interest rates warrants close monitoring.
Opportunities exist for investors and developers in both urban and exurban markets, particularly in well-located centers with redevelopment potential. Essential retail, especially grocery-anchored centers, continues to provide stable returns, while newer, mixed-use projects offer exposure to evolving consumer lifestyles.
Atlanta isn’t just holding steady — it’s evolving smartly. And for those willing to think strategically, this market still offers plenty of upside.
— By Matthews Real Estate Investment Services. This article was originally published in the May 2025 issue of Southeast Real Estate Business.