Large Leases Strengthen Atlanta Office Market

The Atlanta office market may finally be seeing a recovery after a brutal period and hitting a record level of vacancy.

In the first half of this year, Atlanta recorded five office leases of at least 100,000 square feet, totaling 752,300 square feet, the highest figure since before the pandemic, the Atlanta Business Chronicle reported, citing Cushman & Wakefield data.

For comparison, only two leases crossed the 100,000 square foot threshold in Atlanta all of last year. There have not been more than 600,000 square feet of leases of this size in a six-month period since the first half of 2020.

The five leases averaged nearly 150,500 square feet, which equates to about six floors in a typical office tower.

The largest of the deals came from Atlanta Gas Light, which leased 264,300 square feet in Midtown Center II. Piedmont Healthcare also made a significant commitment to Midtown, leasing 164,000 square feet in the 25-story office tower at 271 17th Street Northwest, as part of a consolidation effort.

AT&T has signed two leases for just over 100,000 square feet at Parkside at Lenox Park in Bucktown. Finally, the Georgia Department of Revenue acquired 118,000 square feet at 2500 Century Center in northeast Atlanta.

The increase in large leases dovetails with indications from brokers that more companies are once again seeking larger office space. It’s a positive sign for an office market that has been hit by remote work trends, sending vacancies to historic highs, approaching 30%, as companies continually reduce their footprint.

However, it is too early to say that a full recovery is on the horizon.

“It’s a positive story, but I don’t want to say it’s a trend until we see this for a few quarters,” CBRE’s Audrey Giguère told the outlet.

The increase in large leases also corresponds to an increase in return-to-office mandates. Atlanta companies such as UPS and NCR Voyix have required most of their employees to return to the office five days a week.

—Quinn Donoghue