Market Trends | Duluth/Suwanee/Buford Office Submarket

By Chaoyang (Charlie) Yu, MSRE, MSQRAM

During the past few months, our team has met with a lot of investors who showed a strong interest in investing in commercial real estate. It is no mystery that the commercial real estate market is very hot right now!

“What type of commercial real estate should I invest in?” and “How should I start it?” are the most frequent questions I have been asked. In order to best answer these questions, we must know what is happening within the market. I  decided to launch this blog series of market trends with our data resources and knowledge to help investors or business owners make informed decisions about their investments.

Our team office is located at 2750 Premiere Pkwy, Duluth, in Gwinnett County which has been one of America’s fastest-growing counties over the last 20 years. Many investors have shown their interest in this booming county and the area adjacent.

In general, Commercial real estate advisors usually draw submarkets corresponding to each of the four main property types (Office, retail, Industrial, Multifamily). I listed the submarkets that we are going to cover in this series below. They are all in or around Gwinnett County.

Today we are going to explore the first submarket together.

Duluth/Suwanee/Buford Office Submarket

  • Summary

The office market in Duluth/Suwanee/Buford has been relatively stable in recent years, as developers have been increasing residential and commercial densities in high-traffic areas of the submarket, attracting office users. Strong population growth and a steadily rising percentage of residents with a bachelor’s degree or above underpin stable fundamentals.

Construction activity in the submarket has remained low in past years. However, slow leasing velocity will lead to muted net absorption over the next few quarters and should make it difficult for owners to raise rents, even if supply additions remain minimal.

  • Key Statistics
    • 1,062 Office Properties (40 class A, 635 class B, 382 class C)
    • 72% Market Cap Rate
    • Market Sale Price: $158 per sq Ft
    • 12 Month Deliveries: 25.8K
    • 12 Month Net Absorption: 155K
    • vacancy Rate: 12%
    • Rent Growth: 1.2%
    • Market Rent: $22.36 per Sq Ft
    • Inventory SF: 17.6M
  • Significant Transaction:
    • May 2021, Northside Hospital acquired a 33,000SF medical office at the Duluth Professional Center for $6.1 million ($182/SF) at a 6.5% cap rate.
    • Sep 2021, The Simpson Organization acquired a 143,493SF at the Suwanee Gateway One for $21,620,000 ($150.67/SF)

Call DARKATEAM to get more market information (678)890-7055