Atlanta Office Absorption Goes Into Positive Territory For First Time In Over 3 Years

For the first time since the end of 2022, Atlanta’s office tenants leased more space than they emptied in a single quarter, with 215K SF in positive absorption in the opening months of the year, according to Avison Young.

Office attendance may be finding its new post-pandemic normal as developers are showing a reluctance to build new office space and a growing comfort with razing older buildings.

The trio of factors is helping to deflate the elevated vacancy levels of 2025, according to an Avison Young report.

Overall, there was a 385K SF swing in absorption in the Atlanta metro area year-over-year, with tenants emptying 170K SF more than they leased in Q1 2025.

The return to the office is giving companies more assurance on how much space they need moving forward, Avison Young Senior Manager Sara Barnes said.

“They are feeling better. Their return-to-office plans are fully in place,” she said. “Back to the office is probably moving [positive absorption] more.”

Two move-ins that boosted absorption in the first quarter included AT&T taking 160K SF at Cousins Properties’ Northpark Town Center in Central Perimeter and KPMG’s move from Downtown Atlanta to 105K SF in Midtown’s Proscenium building at 1170 Peachtree St. 

In a reversal of the recent trend of companies flocking to the best office space in Metro Atlanta, particularly in the urban core, Avison Young also noted that suburban Class-B office — long the pariah of the post-pandemic office world — demonstrated stronger absorption than its Class-A brethren.

Commoditized office recorded nearly 300K SF of positive absorption in the first quarter, while Class-A buildings lost 85K SF, and trophy office saw 14K SF of negative net absorption. 

The dwindling availability of prime space has forced companies to step a class down and choose buildings offering speculative, move-in-ready spaces or buildings that have had amenity overhauls, Trinity Partners Director Cori Nuttall said 

Tenant activity overall is leaving room for optimism in the metro area, she said.

“We are certainly tracking a larger average tenant size in the market right now, which is really encouraging,” Nuttall said. 

Metro Atlanta tallied 3.08 million jobs in January, according to the Bureau of Labor Statistics, up 0.1% from January 2025, with jobs in the financial services and professional and business service sectors gaining less than 1%.

However, the information industry lost more than 4% of jobs during that period, and nearly 2% of government jobs shrank in the area. 

Some brokers cautioned that the office market isn’t completely out of the woods, with C-suite decision-makers anxious regarding economic and geopolitical concerns and questions still swirling around artificial intelligence's impact on white-collar jobs.

However, it is better to have positive signs to start off the year even amid such macroeconomic uncertainty, Greenwood Commercial Real Estate Group founder James Pitts said. 

“It’s like a cough is better. Things are surging in certain areas and not in others, but overall, it’s positive,” Pitts said. “I think the fact that there’s been that kind of demand, given all the tariffs, the economy is really resilient. More resilient than people expected a year ago.”

While the technology sector was among the three largest industries leasing office space in the first quarter, according to Avison Young, its activity was still down from the last few years. 

Pitts said a spate of layoffs in the tech industry, driven in large part by AI displacement, is having a chilling effect on Atlanta office leasing among those companies. More than 52,000 tech jobs were cut from U.S. payrolls in the first quarter, a 40% increase from the 37,000 jobs cut in Q1 2025, according to outsourcing firm Challenger, Gray & Christmas.

Companies are investing in AI and cutting jobs, Challenger said in its report. The firm expects further tech job cuts in 2026. 

But Pitts said he expects that tech companies and firms laying off employees for AI will likely reverse course at some point.

“I think that people are going to go too far,” Pitts said. “We’ve seen that with a couple of clients who saw AI impact their business models. But the pendulum shall return.”

The positive returns from Q1 office leasing have been a long time coming, and it may even gain momentum, CBRE Senior Vice President David Todd said. 

He said a lot of the activity last quarter is attributable to pent-up leasing decisions by companies. Many of his clients told him last year that they wanted to wait until March to sign leases to see how the Federal Reserve would move on interest rates.

“I found, for my clients, all are sort of kicking the can a little bit,” he said. “Now they’re saying, ‘We’re going to do something. Let’s see what May looks like.’”