Demand for office space cools amid economic headwinds

Atlanta’s office market experienced a slowdown in the final quarter of 2022. Amid greater economic concerns, quarterly leasing volume declined 36% year over year with Q4 leasing totaling 1.6 million square feet (msf). Macroeconomic concerns such as persistent recession fears, rising interest rates, and an increased use of hybrid workplace strategies have slowed demand despite strong underlying employment fundamentals throughout the year. Despite the recent decrease in leasing activity, office space demand in Atlanta has shown proven resilience over the year with 2022volumetotaling 7.5 msf, up from 6.9 msf of leasing reported in 2021 and the highest reported since the beginning of the pandemic. With the migration of new companies from outside the market in search of top talent, a business-friendly environment, and relatively low real estate costs when compared to peer metros, the long-term outlookof the Atlanta office market remains highly positive.

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