Atlanta Office & Industrial Market: Third Quarter 2024
October 21, 2024Atlanta Office & Industrial Market: First Quarter 2025
First Quarter 2025
Leasing activity is up; tenants more confident signing longer lease terms
The Atlanta office market entered 2025 on more stable ground than the previous year. Leasing activity has increased, and availability has decreased slightly. By the time the final figures for the fourth quarter of 2024 are tallied, last year’s annual leasing activity will align with the annual aver-age from 2015 to 2019.
Tenants have shown greater confidence in signing longer lease terms and are seeking larger spaces than they did a year ago. Even if tenants don’t require all the space immediately, they anticipate needing it, particularly companies planning a return to the office.
Atlanta’s appeal continues to flourish in the long term, fueled by a diverse industry base, affordable living costs, a rich talent pool, and strong job growth in the finance, professional services, and technology sectors.
Vacancy rises; groundbreakings tapering post peak supply wave
Over the past year, the Atlanta industrial market has experienced a noteworthy downshift from the flurry of activity seen several years ago. The area’s total vacancy rate has increased to 9.1%, surpassing the market’s 10-year average of 5.8%. Quarterly demand has been muted, with new deliveries outpacing net absorption for the past several years. The combination of subdued demand and a record wave of recently delivered big box spaces is likely to result in continued increases in vacancy over the next several quarters.
Atlanta’s location along the growing Interstate 85 corridor and nearby southeastern ports positions the area as a regional distribution hub. Population growth in the wider Southeast region has bolstered spending in the market. However, industrial deliveries and weak absorption will likely lead to increased vacancies through early 2025.