Office demand is improving and that's reflecting across the board in Atlanta. For the first time in 2025, net absorption was positive, at 156,000 square feet in the third quarter, according to a market report from CBRE.
"The bulk of the gain was the result of a national financial institution taking 250K sq. ft at 5 Ballpark Center, resulting in Cumberland/Galleria's largest occupancy in over a decade," CBRE said of the demand, but added: "While this marks a welcome uptick, the move also triggered a notable loss in Buckhead which experienced negative absorption in Q3."
The strong demand came as rental rates were pushed up by five percent from the previous 12 months to $33.62 per square foot. CBRE attributed the growth to "availability of higher quality spaces." Atlanta's trophy properties surged by eight percent to reach $54.68 per square foot.
Overall, availability went down by one percent to 31.3 percent, although CBRE did note that the category "remains elevated."
Leasing activity overall was strong, increasing by 15 percent to 2.4 million square feet. Also, average new deal sizes were up by 22 percent quarter-over-quarter. UPS commanded the largest lease in the third quarter thanks to its 310,000 square foot sale/leaseback in North Fulton. EY and Holder Construction followed the package handler with their 102,195 square feet and 64,609 square feet deals, respectively.
"This growth has been driven by marginal rate increases across the market thanks to the availability of higher quality spaces," CBRE explained.
Another important thing to keep an eye on in Atlanta's office sector: While 224,000 square feet is underway, no major developments have broken the ground this year. Also, office conversions and demolitions are picking up steam in the market, according to CBRE — projecting well for future fundamentals.
"Central Perimeter is leading this shift, with a projected loss of 3.5M sq. ft. of office space in the coming years," it said.
"The combination of limited new supply and the trimming of existing office stock is expected to place upward pressure on rent rates, particularly in areas with strong demand."
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