Atlanta office leasing had its slowest quarter since Q1 2023 as more companies opted to stay put under rising construction costs and no new office deliveries. 

Renewals accounted for six of the 10 largest leases inked in the third quarter, according to Savills, including law firm BakerHostetler's renewal and expansion to 88K SF and Acuity Brands’ nearly 49K SF renewal, both of which remained at the 24-story Proscenium office tower in Midtown. 

The only new leases in the top 10 were ASP Global's 24K SF deal at 3333 Riverwood Parkway in Cobb County and EverOn Data Center Services' lease for 21,500 SF at 1055 Howell Mill Road in Midtown. The remaining two leases in the top 10 were an extension and an in-market relocation.

According to Cushman & Wakefield, renewal activity jumped nearly 25% from the second quarter, with companies renewing more than 714K SF, nearly 78% of the 920K SF of overall leasing in the third quarter. 

As long as construction costs remain elevated, more companies are likely to elect to keep their bird in the hand, Colliers Vice Chair Jodi Selvey said. 

“There’s definitely a propensity for renewals,” Selvey said. “Moving is just so expensive, and rates in your top-tier buildings have gone up considerably. If they’re in a good building, moving into another good building doesn’t help.”

Construction-related materials prices skyrocketed more than 13% year-over-year in the U.S., nearly five times the rate last year, Bisnow reported late last month, with metals like aluminum and copper rising more than 40%.

That is pushing costs beyond what landlords are willing to give to prospective tenants in their build-out allowances, Selvey said.  

“If they move to another space and they want the same thing they have, typically the allowance doesn’t cover it,” she said. “So it’s cash out of pocket. And people don’t want to do that.”

A lot of today’s renewals were deals inked during the pandemic, when costs to relocate were significantly lower, said Cedric Matheny, a partner with office brokerage firm T. Dallas Smith & Co. Companies that waited until near lease expiration to consider other office options are particularly likely to stay put, Matheny said.

“It’s definitely cheaper to renew than it is to move,” he said. “It’s the easiest thing to do when they don’t have a lot of time to move.”

And there are fewer places to move to. Developers had zero new office projects of significance underway in Metro Atlanta in the third quarter. The last significant project, the 60-story 1072 West Peachtree mixed-use tower that includes 224K SF of prime office, delivered earlier this year. 

That pause in new projects — the first time in 15 years — has given landlords of existing offices a chance to lease up properties. Indeed, companies gobbled up 6.2M SF of office space in 2026 through the third quarter, with 65% of the activity focused on Class-A towers, according to Savills. The overall vacancy rate fell 140 basis points to 26%, and sublease availability fell by 1.2M SF to a little more than 5M SF by the third quarter. That was despite Comcast placing 250K SF of its office space at One Ballpark in The Battery Atlanta at Truist Park on the sublease market, according to Savills. 

Jeff Pollock, founder of Atlanta-based Pollock Commercial, said that while his tenant activity has been busy this year so far, renewed office deals outweighed new office deals by 2-to-1. Pollock said many tenants are finding that, with no new office development in the pipeline, existing landlords are in a better position to raise rents. 

Rents surged 3.8% year-over-year to $35.22 per SF, with Class-A office space rising 3.2% to nearly $38 per SF, according to Savills. And trophy office space in Atlanta is approaching $70 per SF.

“Even though companies aren’t expanding, they’re having to pay more,” Pollock said.