Atlanta Lenders and Developers Ignored Warning Signs of Recession

The amount of available office space in Atlanta over the past five years has increased by nearly 6%. As other cities in the country braced for the recession, Atlanta's lenders and developers ignored the warning signs and remained optimistic about the technology sector. Thinking that technology would continue to grow, many lenders eased up on financing terms, which caused some real estate developers to enter into risky projects. The resulting construction boom added an additional 3.6 million square feet of commercial space to the Atlanta market between 2008 and 2010. Even in the city's most affluent areas, the commercial real estate market historically has only been able to absorb between 200,000 and 300,000 square feet of additional space per year.

Further complicating the commercial real estate market, the unemployment rate in the city had hit 10% by the fourth quarter of 2010. Companies were downsizing the workforce and the space needed to operate. While analysts agree that a dramatic improvement in Atlanta's employment rate could help remedy the situation, forecasts suggest that a return to pre-recession employment may only occur after 2014. But even a return to pre-recession employment may not help much since the city's vacancy rate was already on the rise before the recession hit. As a result, employment figures would have to rebound well beyond pre-recession figures to positively impact the commercial market. As supply outstrips demand, landlords desperate to attract tenants are offering space at a significant discount. Rents are so depressed that it may take until 2016 for revenue to rebound. In the meantime, with less income generated, developers and landlords are hard pressed to meet their financial obligations. The result is an increase in the number of distressed properties, and ultimately, foreclosures. As of mid-2010, Atlanta led the country in seizures of real estate backed by securitized loans.

For a city used to leading the nation in relocations fueled by a growing economy, the cruel reverse of fortune is taking its toll. Between June 2009 and June 2010, Atlanta led the nation with the highest percent of real estate transactions involving distressed properties - 46 percent. In 2010, Elaine M. Russell created, a service that matches lawyers seeking to sublet space with unoccupied office space at compatible law firms around the country. Elaine is a corporate and business attorney representing clients throughout Georgia. Elaine's office is located in the Buckhead section of Atlanta. Notes: Taken from:

Reasons To Work During Law School - A 3L's Personal Reflection

Working throughout law school has been an amazing and unique experience. I can honestly say that my life would not have been the same without having had the opportunity to experience the law in a real-world, work environment. My experience has given me an opportunity that many law students might not have, and I'm thankful for that opportunity. Although it was often difficult to manage my work schedule with my class schedule, making me question my decision to pursue both school and a job at the same time, I was afforded the chance to analyze the court room environment, experience the goings-on of a law office, and strengthen my legal research and writing skills, while my classmates were seeing the law from the confines of the classroom.

A. Job Interviews: Work Experience Made the Difference Prior to the 2010 summer, I had the overwhelming privilege of receiving multiple summer job offers from both sides of the criminal justice system, and I owe it all to working during law school. Before coming to law school, it was my dream to be a public defender so that I could help others (pardon the clich

Law Firms - Don't Use Your Empty Offices For Storage - It's a Waste

Law firm and empty offices - this is the norm now. Don't make your empty law offices storage depots. Empty law offices mean lost cash-flow. If your firm is using empty offices to store old files, office supplies or furniture, your law firm is in a lose-lose situation. Simply, you are paying a certain amount of dollars per square foot to your landlord or to your mortgage holder for this space (if you own it). Sadly, there is little relief in the near future with this economy. Deal with your surplus space--subleasing and space sharing is your answer. Advertising the surplus space has not worked. Where are viable subtenants? Because your law firm administrator may not necessarily have the experience of advertising surplus space or seeking compatible attorneys for subleasing, the file boxes, furniture and excess equipment continue to fill the surplus offices of your law firm. The answer is subleasing. Subleasing will mitigate the loss from surplus space.

Your solution is to go to where you will be able to quickly post your empty law offices where an attorney searching the web by his or her desired zip code, will find your post quickly and easily. Don't miss out. Post your empty offices on for a reasonable fee. Lawyers seeking a turn-key law office will contact you after locating your office through a detailed zip code search. Print advertising is expensive, and it has not worked for you because it does not reach the target market at the time you need to fill your space. The internet is your inexpensive solution.

Let do the work for you...not your law firm administrator, managing partner, or an uninterested real estate broker. Move your files and furniture out of your unused offices today. Sublet or share unused space with lawyers seeking an office in your zip code.

Don't Count On Your Real Estate Broker When you Need a Sublease of Your Law Office Space

Does your law firm have various empty offices, either due to downsizing or lease planning with the expectation of "growth" which has not yet occurred? With surplus space and time remaining on the lease, your law firm has several options. Your office manager can contact a real estate broker, who you will hope to find a sublet which will help defer your costs. The problem is: (i) brokers do not like sublease assignments because the sublease market is twice as competitive as the new space market; (ii) subleases require up to twice the work as a normal assignment; (iii) the fee from subleases averages only 25% of the normal sub-assignment; and (iv) brokers are undoubtedly concerned about the chance of subtenants defaulting on the sublease. With all this in mind, law firm administrators and managing partners currently have to use their valuable time acquiring a subtenant.

Also, sublease assignments generally require the written consent of the landlord. With very few avenues for obtaining a subtenant, hard costs for print advertising, excess expense and the opportunity cost typically deter law firm with surplus space from actually finding a tenant to sublet. Despite the lack of enthusiasm real estate brokers will have for helping you with a sublease, your landlord will want you to use their broker rather than an outside broker. This is a major impediment and will require you to work with someone who really has the landlord's interest at heart. The new solution is an on-line matching service for law firms seeking to sublease surplus space and lawyers hunting down a turn-key office for their law practice. Simply go to

Your problem will be solved when you post a short description of your surplus office space, identifying various amenities including copying, internet, research tools, conference room, and whether the office is furnished or not. Add a photo and you are done. This cost is minimal. Potential subtenants exist--lawyers who are seeking to find empty law space as a result of a move, layoffs from law firms where they were employed, or simply part-time lawyers who are moving back into a full-time law practice.

Atlanta Office Space Glut Mirrors Situation Nationwide and Provides Opportunity for Attorneys

As we mentioned in my previous post, "I Can't Get No Satisfaction Looking for a New Law Office in Atlanta", unused law offices exist. Commercial vacancy rates in Atlanta increased by almost 2 percent between the end of 2009 and 2010. Cushman & Wakefield reported this as the highest overall vacancy rate in Atlanta (including direct and sublease space) since 2004. 

Despite this, sublease vacancies in Atlanta did decrease steadily during 2010 to just below 2.7 million square feet. As one of the country's most vibrant cities, Atlanta is usually ahead of national economic improvement trends, but overbuilding in the commercial building sector before the economic downturn in 2008 left the market with an overabundance of commercial space. Other cities like Phoenix and New York are also experiencing this issue due to overbuilding, while key Midwest markets such as Chicago, Cleveland and Detroit are suffering due to slow redeployment of the workforce. In most markets, the continuation of downsizing efforts combined with consolidation of businesses in 2010 has made the recovery difficult. While the lagging economic indicators may dishearten landlords and commercial developers, conditions are ripe for bargain hunters or any individual looking for a place to hang a shingle for their business. Many commercial landlords are offering leasing at discounted rates to lure prospective clients, while some high-end developments are providing luxury amenities for little or no cost in an effort to boost occupancy rates.

Perhaps most intriguing is that subleasing opportunities abound as businesses seek to rent out unused office space that is damaging to profits. Many law firms fall within this category. These firms cut back on staff and currently have open offices that can be filled with professionally compatible lawyers in need of an executive environment in which to operate. Especially for law firms, the right match can benefit both parties well beyond the landlord/tenant arrangement. 

In 2010, Elaine M. Russell created, a service that matches lawyers seeking to sublet space with unoccupied office space at compatible law firms around the country. Elaine M. Russell is a corporate and business attorney representing clients throughout Georgia. Elaine's office is located in the Buckhead section of Atlanta. Resources: C&W: Atlanta's Office Market Shows Improvement in 2010, Posted January 6, 2011, City Biz Real Estate