Georgia is a largely rural state, with the exception of its cosmopolitan capital city, Atlanta. When thinking about commercial real estate in Georgia, unless you're thinking of vacation or recreational property, Atlanta should be the first and last stop on the list. Even within the Atlanta area, however, most development and investment activity has been concentrated in downtown and midtown Atlanta and the Buckhead Neighborhood.

In Atlanta, even the housing market is still strong. Particularly, multifamily construction, including condo-conversions, is still a booming sector. Atlanta's residential market still harbors some speculators and investors, largely because there's still money to be made. The median home price in Atlanta is still about $200,000, and, at that price, demand is flat, but not dropping. Though new construction has dropped, activity in the existing housing market has mad up for that. Presently, that makes the whole housing market about even, but over the long-term, there should be drastic growth in all sectors of Atlanta's housing market.

Not surprisingly, Atlanta's mixed-use market is fairly strong. It's also flat, as demand and supply are in a pretty good balance, with vacancies for offices and residential units both at around 10%. On the one hand, there is some concern about a declining office market in the Atlanta area, as returns on land purchased for office construction or with office improvements are shrinking. Additionally, operating costs are outpacing rental rates, and strong job growth does not appear to have any effect on top-tier properties. On the other hand, some real estate experts see this as simply the cost of doing business, asserting that though returns may not be as large as they once were they are still healthy. Existing lessees in the urban core are absorbing more office space, and subleasing is down.

Atlanta's industrial sector has had one of the highest vacancy rates in the nation for the last few years, but those vacancy rates have been slowly coming down and are expected to drop further as the port of Savannah picks up more tonnage in the coming years. Indeed, the port is predicted to double its current traffic in the next decade. It is expected that much of the rebirth in the sector will come from warehouse activity.

There is some concern about the extent of development activity in Buckhead as those who know the area best don't believe it has the infrastructure to support the development boom that has been going on there in recent years.