Large Leases Bolster Atlanta Office Market

Atlanta’s office market may finally be on the upswing after a brutal stretch and reaching record-high vacancies.

Through the first half of this year, Atlanta saw 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 data from Cushman & Wakefield.

For comparison, there were just two leases that crossed the 100,000-square-foot threshold in Atlanta all of last year. There haven’t been more than 600,000 square feet of such lease sizes over a six-month stretch since the first half of 2020.

The five leases averaged nearly 150,500 square feet, equivalent 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 at Midtown Center II. Piedmont Healthcare also made a big 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 signed a pair of leases for just over 100,000 square feet in the Parkside at Lenox Park in Bucktown. Lastly, the Georgia Department of Revenue took 118,000 square feet at 2500 Century Center in northeast Atlanta.

The surge in large leases aligns with indications from brokers that more companies are once again seeking larger office spaces. That’s a positive sign for an office market that’s been pummeled by remote-work trends, driving up vacancies to historic highs, approaching 30 percent, as companies continuously shrink their footprints.

However, it’s too soon to say that a full-on recovery is on the horizon.

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

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

—Quinn Donoghue