The Macon, Georgia office leasing market is primarily comprised of three office corridors. The North Macon Suburban Corridor (I-75/Riverside Dr.) extends from the I-75 Pierce Avenue Exit North along Riverside Dr. to the Bass Road Exit. The West Macon Suburban corridor focuses at the Zebulon Rd/I-475 Exit and also covers the Forsyth Road area. The Downtown Macon Market is made up of Downtown Macon’s Central Business District and the areas around it extending to I-16
The Macon Georgia Downtown Market showed a 2015 year end 86% lease occupancy rate. During the last few years, some of the large blocks of space were absorbed which boosted the overall occupancy rate. Bibb County’s purchase of the 43,000 square foot 111 Third Street and the 15,500 square foot 455 Walnut Street Buildings contributed to the decrease in vacancy. Additionally, the Baconsfield buildings located east of Downtown were removed from the study.
According to Fickling & Company’s recent survey of over 1 million square feet of suburban office lease space in Bibb County, the suburban office market occupancy lease rate is currently 83%. Leased Class A Office space has stabilized at 88% occupancy. Significant expansion of the professional office supply has not occurred during the last several years. There are no speculative units on the market at present. Vacant land continues to be in generous supply with lots still available in Preston Park, Bass Road, Providence, Northside Crossing, Elnora Drive, Gateway Drive, Arkwright Landing, Riverside Crossing and Overlook Business Park at Bass.
The strongest Macon office submarket again is the Zebulon Road/I-475 corridor. Occupancy in that area continues to be above 95%, as it has been for the past several years.
As in the past, most of the new office leases in both suburban and downtown markets are from relocation and expansion of existing office users. No significant changes in the Macon office market are expected in 2016.
New “turn-key” construction costs, including building and land, range from $135 to $190 per square foot for projects under 10,000 square feet. The overall range has not changed much over the previous year, but vary widely due to preferences in finish and location. Older properties generally have higher vacancies, and landlords continue to offer aggressive incentives to keep existing tenants and secure new tenants. Tenant improvements for existing space vary significantly, but $10.00-$15.00 per square foot appears reasonable. Demand for owner occupied buildings seems to have increased in 2012 as potential buyers sought to benefit from the discounted sale prices, low interest rates, and improving financing options.
The continued difficulty in securing tenant improvement funds extends the motivation of owners and tenants to use creativity such as longer term leases, buy-out options and office configuration flexibility to make future tenant improvements more feasible. Creative tenancy will continue to drive portions of the market for the foreseeable future.