James Cate has a message for developers thinking about building new office buildings in Atlanta: Don’t do it.

The founder of Glenfield Capital said developers should instead invest in and refit existing office properties to help the market chip away at the area’s vacancy rate. Atlanta-based Glenfield Capital owns nearly a dozen suburban office properties in the Southeast.

“The last thing we need to do is develop any office here for a while,” Cate said Wednesday during Bisnow’s Atlanta Office Conference at the Marriott Marquis in Downtown Atlanta. “If you want a healthy office market, you need zero new development.”

For the first time since 2022, Metro Atlanta’s office tenants have leased more space than they vacated in a single quarter. At the same time, developers have pulled back on new development. In the first quarter, the only project under construction was 1072 W. Peachtree St., the 60-story mixed-use tower that includes 224K SF of trophy office in Midtown, according to CBRE.

Panelists generally agreed that the time still isn’t right to start building. Developers would need to achieve rents of more than $80 per SF to justify breaking ground, said Heather Lamb, senior vice president of Highwoods Properties.

Cousins Properties and apartment developer Crescent Communities have expressed interest in erecting new office buildings in the tony Buckhead submarket. Cousins CEO Colin Connolly told investors on a fourth-quarter earnings call that the lack of large blocks of office space in Atlanta could precipitate a new project.

Connolly said he hopes to “identify a new development start that can break ground in late 2026 or 2027,” The Atlanta Journal-Constitution reported.

But given supply and demand, the office vacancy rate needs to fall below 20% before the numbers begin to justify new construction, Cate said.

“For the sake of stakeholders in our city, we want this to take a long time,” he said. “You've got to get below 20%, and that’s going to take time.”

Still, other panelists cautioned that some companies opening new office hubs in the Southeast may be overlooking Atlanta because of a lack of new office development. Over the past year, Starbucks, Apollo Global Management and asset management firm Capital Group all announced plans for regional headquarters in the Southeast outside of Atlanta.

“Nashville has new construction happening, literally right now. There is space for those new agencies to go,” Lamb said. “We don’t have the same space options in Atlanta as these markets that are younger.”

The metro area has still had a few wins in recent months. Earlier this year, Yamaha announced plans to move its headquarters from California to Kennesaw, which is more than 30 miles north of Downtown Atlanta. Healthcare software firm Glytec also announced plans to move its headquarters from Boston to Metro Atlanta.

And momentum in office leasing is a positive sign for the beleaguered industry. Over the four quarters through Q1, companies leased nearly 7M SF of office space in Metro Atlanta, according to CBRE. While that was down 438K SF from the four quarters through Q1 2025, panelists said the tone among tenants is shifting as they seek to occupy more space.

“That whole motto of everyone is shrinking is definitely going away,” Lamb said.