Retail Vacancy in Atlanta Falls to Historic Low, but New Construction Dries Up

Retail construction in Atlanta has dropped over 40% since Q2 2024. By May 2025, even with vacancy at a record low, new development has hit its lowest level in history.

The city needs space. So why isn’t anyone building?

Less than 700,000 square feet of retail is under construction—far below the 880,000 SF low seen after the 2011 recession.

High Costs, High Caution

The problem isn’t demand—it’s cost. Construction materials, labor, and interest rates have all surged. Developers are reluctant to move unless they can prelease most of the project. Financing remains tough, and only 20% of current projects have space available for lease.

Tight Market, No Relief

Retail vacancy is just 3.9%, well below the 10-year average. Some brands have exited, but demand hasn’t dropped. In prime areas, tenants are competing for fewer options—yet new projects aren’t coming online.

What’s Still Being Built?

Mostly small-format, fast-moving projects:

•  Whataburger (3,300 SF) in Peachtree City

•  Chick-fil-A (5,000 SF) in Powder Springs

•  Shell station in McDonough

•  Circle K in Acworth (delivering this summer)

These are lower-risk bets with quick returns—unlike traditional retail centers.

Only Two Projects Have Space Left

• Terminal South (SE Atlanta): 5 spaces, 1,490–2,085 SF, $45/SF (NNN)

• Upper West Market (NW Atlanta): 8,100 SF, $40/SF (NNN)

That’s it. Inventory is extremely tight.

What’s Next

CoStar predicts 2025 will mark Atlanta’s lowest retail delivery ever, with 2026 looking the same. Tariffs could push material costs up another 2–3%, keeping developers on the sidelines.

If you’re planning expansion, start early—space isn’t just limited. It’s disappearing.