Atlanta Office & Industrial Market: Second Quarter 2025
July 10, 2025Atlanta Office & Industrial Market: Third Quarter 2025
Third Quarter 2025
Atlanta office market shows early signs of stabilization and renewal
Atlanta’s office market is showing early signs of stabilization after several challenging years. Availability has declined for six straight quarters, with high-end building vacancies also shrinking. Tenants are regaining confidence—negotiating leases earlier, signing longer terms, and expanding their footprints. In 2024, large lease activity jumped sharply, driven by companies anticipating future growth and office returns.
Despite these improvements, overall vacancy remains near record highs at 21%, underscoring the need to remove outdated inventory. Redevelopment of older campuses, like Toro Development’s Alpharetta project, is reshaping the landscape. Investors anticipate increased ownership turnover in 2025 as interest rates steady and distressed assets reposition. Flat rent growth and attractive concessions may lure tenants to newer, well-capitalized properties, signaling gradual recovery and renewed investor interest heading into next year.
Atlanta’s industrial sector enters correction phase after record growth
Atlanta’s industrial market has entered a correction phase after several years of exceptional growth. The metro’s vacancy rate has risen to 9%, above the 10-year average of 5.8%, as new deliveries outpace absorption and quarterly demand turns negative. Availability has surged in submarkets with heavy big-box construction, such as Kennesaw/Acworth, where more than 15 facilities exceeding 200,000 square feet have delivered since 2023. Slower demand from third-party logistics firms and tenants tied to the housing sector has further contributed to the softening.
Speculative development has declined sharply, with only 25% of under-construction space still available to lease, compared to 60% last year. Rent growth has cooled to 1.0% annually, though prime airport and I-75 corridor locations remain strong. With construction starts down significantly, tighter vacancies and renewed rent acceleration are expected by late 2025.