Economy: Major Employers Double Down On Atlanta
Atlanta’s office market continues to build momentum as companies deepen their investments in the region. Authority Brands recently announced plans to relocate its headquarters to Atlanta, bringing nearly 400 jobs. The announcement adds to a growing list of corporate investments that continue to reinforce Atlanta’s appeal to expanding businesses. This ongoing investment further validates Georgia’s distinction as Area Development’s top state for business for 12 consecutive years With a diverse economy, strong talent pipeline, and business friendly environment, Atlanta remains well positioned to attract future corporate growth.
Demand: Leasing Demand Was Widespread Across The Metro
New leasing demand remained steady during the second quarter, totaling 1.3 million square feet (msf) across the metro. Suburban submarkets continued to drive activity, accounting for nearly 60.0% of Atlanta’s new leasing volume at 797,834 sf.
Midtown led all submarkets with 389,075 sf of new leasing activity, accounting for more than 70.0% of the CBD total, followed by Central Perimeter (251,659 sf) and Northwest Atlanta (213,321 sf). The quarter’s largest transaction was Pinnacle Financial Partners’ 165,000-sf lease at 1020 Spring in Midtown, underscoring continued demand for premier office space in Atlanta.
New leasing activity in the CBD increased 16.5% quarter-over-quarter (QOQ), reaching 544,330 sf. New lease transactions accounted for a majority of demand, as four of the market’s five largest transactions were new leases. Renewal activity totaled 526,180 sf, supported by notable transactions including BlueLinx’s 49,123-sf renewal in Northwest Atlanta and Jaguar Land Rover’s 34,327-sf renewal in the Airport/South Atlanta submarket.
Supply: Occupancy Gains Drive Vacancy Improvements
Atlanta’s overall vacancy rate declined 19 basis points (bps) QOQ and 25 bps year-over- year (YOY) to 24.9%, reaching its lowest level in eight quarters. The suburbs drove much of this improvement, with vacancy falling 23 bps from the prior quarter and 54 bps annually to 20.9%. The CBD also posted a modest improvement, with vacancy declining 12 bps QOQ as several notable tenants occupied their spaces.
Among individual submarkets, Downtown and the GA 400 Corridor posted the most significant quarterly declines, with vacancy rates decreasing 88 bps and 60 bps, respectively, supported by multiple tenant move-ins exceeding 20,000 sf.
Atlanta recorded 299,456 sf of positive net absorption in Q2, marking the second consecutive quarter of occupancy gains. The non-CBD submarkets accounted for a majority of the positive absorption, led by the GA 400 Corridor following move-ins by Hisense (55,000 sf) and Kura Biosciences (50,000 sf). Central Perimeter followed closely, posting 94,409 sf of positive absorption, driven in large part by TriNet’s 64,200-sf occupancy.
The CBD contributed 75,080 sf of positive absorption, despite mixed performance across its submarkets. Downtown emerged as the strongest-performing urban submarket, recording 144,851 sf of positive absorption during the quarter. Eversheds Sutherland’s 94,000-sf occupancy—the metro’s largest move-in of the quarter—led the submarket, alongside occupancies by Mercedes (60,530 sf) and Ogletree Deakins (24,400 sf), reinforcing continued demand for high-quality office space in Atlanta’s urban core.
Rental Rates: Rental Rate Growth Remained Steady
Direct asking rents averaged $33.72 per square foot (psf) at quarter-end, representing a modest 0.9% increase YOY. Within the suburban markets, direct asking rates increased by 1.7% YOY.
Non-CBD submarkets continued to demonstrate stronger pricing momentum. Direct asking rents in the suburbs grew steadily, ending the quarter at $28.01 psf. Northwest Atlanta recorded the largest quarterly increase in the metro, with asking rents rising 2.2% to $29.01 psf. The highly desirable location and premier assets within the submarket have strengthened landlords negotiating power, supporting continued growth through sustained demand.
