Tariff Turmoil Prompts Companies Searching For Atlanta Offices To 'Hit The Pause Button'

President Donald Trump’s ongoing trade war has spooked Atlanta’s office market, with some tenants holding off on making leasing decisions. 

After Atlanta landlords signed office tenants to 10M SF of leases in 2024 — the highest figure in five years — activity cooled to start this year. Brokers who spoke to Bisnow fear that tariffs and economic uncertainty could crush the leasing momentum that started to take hold late last year.

“Several of my clients have hit the pause button,” said CBRE Senior Vice President David Todd, an Atlanta leasing broker who most recently worked with law firm Greenberg Traurig on its 105K SF renewal at Terminus 100 in Buckhead. “There’s a long-term impact if the tariffs get in place, but I think people will hit the pause button for the next 30 days.”

Leasing activity in the first quarter fell by 30% year-over-year, and absorption was negative — meaning tenants vacated more space than they leased — by more than 330K SF, according to Colliers.  

Avison Young principal Kirk Rich said corporate decision-makers have been spooked in recent weeks over Trump’s tariff fight, which could freeze up office leasing even more later in the year.

“I’m concerned because, the last 60 days, the volatility of the entire world stymied CEOs to make decisions,” Rich said. “I don’t think that there’s any way it doesn’t negatively affect everything if it's prolonged.”

Trump slapped a 10% tariff on almost all imports into the U.S. earlier this month, including a 145% levy on Chinese goods. Trump paused a series of reciprocal tariffs on various countries — including Japan, South Korea and the European Union — until July as the administration works out potential trading deals.

Still, the April 2 tariff announcement, dubbed “Liberation Day” by the administration, sent Wall Street reeling, and economists warned the moves could thrust the economy into recession. On Tuesday, the International Monetary Fund revised its global economic growth projection from 3.3% last year to 2.8% this year, attributing the slowdown to the trade war, The New York Times reported.

Brokers say deals haven’t fallen apart directly due to the economic turmoil yet. But since commercial real estate’s reaction often lags real-time economic events, many players say it’s only a matter of time before activity in the metro market falls off a cliff.

“I suspect there are tenant-level conversations being had about potential impacts and there might be some slowing in the future, but we’re not seeing it yet,” said Heather Lamb, senior vice president and market leader for Highwoods Properties, one of the largest office landlords in Atlanta. 

The leases signed during the quarter have been of larger size than recent vintages — tenants did 14 deals spanning 40K SF or more, more than doubling the six a year prior. Among the most notable were Vensure’s 90K SF lease at Sugarloaf I in Gwinnett County, the largest office lease of the quarter, Duracell’s 56K SF deal at Science Square and Unum Group's 57K SF expansion into sublease space at The Terraces in Dunwoody.

StubHub, Veritiv Operating Co., Compass Group and SR-400 Constructors all signed leases 50K SF and larger during the period, according to a CBRE report.

CBRE Senior Vice President Jessica Doyle said the most immediate impact she has seen from Trump’s tariff policy has been the difficulty she has had in quoting firm tenant improvement package offers to potential tenants. She said many general contractors are only holding quoted prices for 15 days, and leasing negotiations take much longer than that.

“My pipeline is still robust,” she said. “Things still seem to be stable. I just don’t see how the tariffs won’t impact.” 

Greenwood Commercial Real Estate Group founder James Pitts said the trade war is already impacting commercial real estate construction in the office sector, with price fluctuations wreaking havoc on underwriting assumptions.

“When you think about it, Liberation Day happened in April. It’s not even been a month. People don’t even know how to react right now,” Pitts said. “It’s going to have a cascading effect.”

Rich said he expects the fallout of the trade war to fully bake into the office market in the next six months.

“We’re in incredibly uncharted water. I don’t think anybody can predict where we are,” he said. “Either the tariffs are well understood, or volatility and confusion are the new norm. And that will not be well received by the business community.”