Class Divide Deepens In Atlanta's Office Market

A surge in office leasing activity in Metro Atlanta helped Class-A landlords fill space in the third quarter as older buildings continue to bleed tenants.

But with little new office development occurring, tenants may soon find themselves with few best-of-the-best options, an industry expert told Bisnow.

Atlanta office landlords posted 84K SF of negative net absorption, meaning companies left more space than they occupied, according to Partners Real Estate’s Q3 report. A closer examination of that figure, however, reveals that Metro Atlanta’s top-tier office buildings are filling up.

Class-A office buildings had 236K SF of positive absorption in Q3, while Class-B structures lost ground by more than 320K SF, “highlighting the ongoing divide between premium and secondary office segments,” according to Partners.

“[This trend] is pronounced. And if anything, it’s even accelerating,” Partners Senior Vice President Steve Triolet told Bisnow. “We still see the nicer buildings outperforming and the bad buildings languishing.”

The Q3 results continue the flight-to-trophy trend that has been occurring throughout the year. Class-A offices absorbed 603K SF since the start of 2025, according to the report. During the same period, Class-B landlords tallied negative net absorption of nearly 760K SF.

This past quarter, leasing activity jumped 41% from the second quarter, with companies inking 2.1M SF in Metro Atlanta. Of that, 1.7M SF of leasing activity focused on Class-A space, according to Partners. 

UPS Supply Chain Solutions signed the largest lease of the quarter after it sold its headquarters building at 12380 Morris Road in Alpharetta to Fortress Investment Group for $93M and then leased the 310K SF facility back. Other large leases included EY’s planned 102K SF relocation to Portman Holdings’ Ten Twenty Spring office tower and electric-vehicle maker Rivian’s 45K SF lease at the Junction Krog District. 

As the office market perks up, brokers said they are seeing new trends emerge.

CBRE Senior Vice President David Todd said companies are becoming more cost-conscious with rents and build-out expenses. This has led to a string of lease renewals or companies moving to similar buildings in other submarkets. 

“I think now it’s economics. Value is coming back into play, especially as people rightsize instead of downsize,” Todd said.

Rents in the third quarter remained essentially flat at $32.38 per SF, although Class-A rates rose to $34.35 per SF, according to Partners.

Trinity Partners Office Leasing Director Cori Nuttall said her firm has seen more professional services firms move to comparable new buildings rather than renewing leases in the last 90 days. 

“We’re seeing more lateral moves,” she said.

Lease term flexibility has become a major issue. Colliers Senior Vice President Jeff Kelley said companies and landlords are now engaging in a tug of war as tenants seek shorter-term leases. 

He cited as an example a company whose 10-year lease was approaching expiration. The company wanted to cap the next lease at five years, Kelley said. Ultimately, the landlord pushed back and negotiated a seven-year deal to help cover the inflated construction costs for the tenant’s build-out, he said. 

“There’s this battle between the desire to have a shorter term versus the need to do a longer term just because of the cost of the project,” Kelley said. 

Options for moving to Class-A space are limited and will remain so in the near term.

According to CBRE’s third-quarter report, only about 23% of Class-A space in Metro Atlanta was “available performing.” This label is affixed to space owned by landlords that had the wherewithal to offer tenant improvement and concession packages and reliably fulfill lease obligations. 

Triolet said the lack of new office development further limits tenants’ choice of prime office space. The pipeline of new office fell 40% from the second quarter to 342K SF, with the majority tied to the 224K SF office portion of Rockefeller Group’s 60-story 1072 West Peachtree mixed-use tower, according to Partners.  

“This is going to have implications down the road,” Triolet said. “In theory, it should help the Class-A properties that are older, that maybe went through some renovations, because there are not as many shiny new buildings to move into.”