Cousins, Piedmont Tout Rebounded Office Demand In Sun Belt

Corporate in-migration into the Sun Belt has picked up steam again as the largest office landlord in Metro Atlanta reports it has more than 1M SF in the pipeline in potential lease deals. 

Cousins Properties CEO Colin Connolly said his firm has seen a “significant uptick in relocation activities” from companies looking to move to Sun Belt markets. They are choosing to do so, in part, because of the threat of new personal and business tax proposals in states like California, New York and Washington, he said.

Recent business headlines seem to strengthen Connolly’s assertion of a Sun Belt revival. 

Starbucks announced in April it was opening a $100M regional headquarters in Nashville. It was reported in late March that financial giant Apollo is seeking a Southeast headquarters, with a focus on Austin, Nashville and South Florida. And asset management firm Capital Group announced last month it was spearheading a $60M East Coast office hub in Charlotte. 

Locally, Yamaha Motor Co. announced it was moving its headquarters from California — where it’s been for nearly 50 years — to Kennesaw, north of Atlanta. 

In the first quarter of this year, office landlords tallied their first positive absorption since the end of 2022, with AT&T and KPMG grabbing big chunks of office space. 

Cousins inked 49 office leases totaling 932K SF in the first quarter, with 52% of those being new and expanded leases, Executive Vice President Richard Hickson said. 

In Metro Atlanta, Cousins leased 192K SF in the first quarter, including KPMG’s new 105K SF lease at the Proscenium in Midtown. It also facilitated CallRail’s 46K SF deal at 725 Ponce in April.

“We believe that we are still in the early innings of this migration trend and expect these announcements to continue,” Connolly said during an April 30 earnings call.

Connolly’s comments echoed the optimism expressed by other publicly traded REIT leaders about the Metro Atlanta commercial real estate market. 

Piedmont Realty Trust Inc. tallied Atlanta as its second most-active office leasing market, securing 12 deals for 88K SF in Q1 2026, Piedmont Executive Vice President George Wells said during a May 1 earnings call. 

Despite this activity, Cousins posted a net loss of nearly $25M for the quarter, down from net income of $20.9M in Q1 2025, according to U.S. Securities and Exchange Commission filings. 

Cousins attributed the loss to a more than $36M impairment loss over the pending sale of One Eleven Congress, a 30-story office tower in Austin. That deal is expected to be consummated in the third quarter.

During the same period, though, Cousins’ rental income climbed nearly 7.5% quarter-over-quarter from $243M to $261.1M. 

Piedmont also posted a net loss of $12.9M for the quarter, up from a loss of $10M year-over-year, according to SEC filings. This was attributed mainly to higher depreciation expense from finished improvements.

Despite the net income loss and the coming loss of two big Piedmont tenants, the firm remained upbeat about re-leasing space in the coming months, especially with a backlog of early proposals and fewer big blocks of space remaining available in key submarkets, Wells said. 

For example, Piedmont has about 300K SF of prospective tenant proposals in the pipeline to help backfill the loss of the two large tenants in Central Perimeter, he said. Wells said the REIT is well-positioned in that submarket.

“One of the advantages here is that when you look at the supply of large block space for 150K SF or larger, there’s only four that really we would call the Tier One, and we own two out of four of those,” Wells said. “So we feel pretty good about that.”

Cousins’ Connolly also said Buckhead — one of the toniest submarkets in Metro Atlanta — is nearing a point where new construction could be justified. The firm has previously announced its intentions of potentially adding office to Buckhead’s skyline.

While the delta between asking rents in Buckhead — between $50 to $60 per SF — and new construction costs of around $90 per SF remains prohibitive, Connolly said the lack of available office space is making the prospect of new construction more likely.

“I use kind of one example where I'm sitting today in the Buckhead submarket of Atlanta,” he said. “If a user today needed 100K SF or had a 100K SF requirement in what I would characterize as a trophy lifestyle office building, they have exactly zero options.”