Flight-to-Quality Leads the Way: Atlanta's Office Market Performance—Q4 2024 Review

As Atlanta remains a competitive and favorable market, decision-makers are presented with unique opportunities to leverage these trends for improved retention, recruitment, and business growth in the year ahead.

• Trophy Assets in Demand

The year ended on a strong note with fundamentals pointing to reasons to be optimistic about the office market entering 2025. Absorption for Q4 was overall negative but relatively modest

(-127,298 s.f.), the least negative quarterly absorption in two years. As observed in prior quarters, and with no end to the flight-to-quality trend in sight, Trophy assets recorded positive absorption (+99,738s.f.) in contrast to their Class A and B counterparts.

• Midtown Trending

Inventory increased but by only 0.1%, as there was 835,000 s.f. of new deliveries and slightly less (648,000 s.f.) removed from inventory. There were three new office deliveries all concentrated in Midtown, which has seen the most development activity of any submarket for over a decade now.

• Transformation for Office

This year, Atlanta observed a multitude of new uses planned for office conversions and demolitions

including apartments, schools, industrial, and senior housing.

• Strong Demand for Move-In Ready Spaces

Sublease availability dropped to the lowest level in eight quarters, falling to just under 4.0% of inventory. Over 85% of sublease space that came off the market was subleased (not withdrawn or expired)

showing the strong demand for move-in ready spaces. Also, several of the larger blocks added to the sublease market this quarter were only a portion of the tenant’s space, indicative of the need for retaining

some office space for employees.

Data Source - JLL

Looking Ahead:

• Expect the strong office demand and uptick in large transactions to continue. Average deal size is up 9.8% QoQ, as Atlanta remains a favorable market.

• Healthy rent growth should continue. Asking rents saw the highest quarterly increase all year in Q4 (up 50 bps), and that

• Market stabalizing. We can expect market conditions to stabilize towards the latter end of 2025 and into 2026, contributed to by supply constraints putting downward pressure on vacancy as quality relocation options dry up.

Data Source - JLL Research

Data Source - JLL Research

In Review:

The Atlanta office market closed Q4 2024 on a promising note, showcasing resilience and emerging opportunities for growth. Key highlights include:

• Flight-to-Quality Trend: Trophy assets continued to outperform, recording a positive net absorption of +99,738 square feet, reflecting a sustained demand for premium office spaces.

• Declining Sublease Availability: Sublease availability dropped to its lowest level in eight quarters, with over 85% of listed spaces being successfully subleased, demonstrating strong interest in move-in-ready options.

• Healthy Rent Growth: Asking rents experienced the highest quarterly increase of the year, climbing by 50 basis points, driven by a tightening supply of high-quality spaces.

• New Developments: Midtown led the market with 835,000 square feet of new deliveries, balancing the removal of 648,000 square feet due to conversions and demolitions.

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Many companies lose millions of dollars due to lack of employee engagement, loss of top talent, and inefficient or unneeded office space.

Working with me, clients gain the insights, the analysis, and the plan to obtain lease and office space that retains the best employees, attracts top talent, and maximizes profitability.

To Contact Gregg Metcalf:

email: gregg.metcalf@jll.com

mobile: 404.661.9284