Atlanta Commercial Office Space for Rent

Q4 2025

Atlanta Commercial Real Estate Market Report

Focus: Q4 2025 Market Trends

Executive Summary

The Atlanta commercial real estate (CRE) market is navigating a distinct "recalibration" phase as it approaches the end of 2025 [1, 3]. While the Office sector is defined by a slow but steady recovery driven by Class A demand, the Industrial sector has shifted into a mid-cycle adjustment following years of breakneck growth [1, 3]. Retail fundamentals remain exceptionally tight, with vacancy rates hovering near historic lows despite some fluctuations in absorption [2]. Multifamily assets continue to be a favored class for investment, even as new construction starts have declined by nearly 50% year-over-year [4].

TenantBase Proprietary Data [7] highlights the distribution of active tenant demand over the last 90 days:

  • Retail/Storefront dominated market activity with 65.93% of all searches [7].
  • Warehouse was the second most active sector at 22.35% [7].
  • Office accounted for 12.96% of total search volume [7].

Office Market

Market Overview Atlanta's office sector displayed encouraging signs of recovery in Q3 2025, primarily driven by a "flight to quality" that favored modern, highly amenitized buildings [1].

  • Vacancy & Availability: The overall vacancy rate edged down to 26.5% in Q3 2025, an improvement from 26.9% in the previous quarter [1]. Sublease availability fell significantly to 2.4 million SF, an 11.8% drop from Q2 2025, signaling that excess inventory is waning [1].
  • Net Absorption: Net absorption dipped to negative 84,246 SF for the quarter [1]. However, this figure masks a sharp divergence: Class A properties recorded positive absorption of 236,038 SF, driven by gains in the Northwest and Midtown submarkets [1].
  • Rental Rates: Average full-service asking rates held steady at $32.38 per SF [1]. Class A rates climbed to $34.35 per SF, with Midtown commanding the highest rates in the market at $42.91 per SF [1].
  • Market Drivers: Leasing activity surged to 2.1 million SF in Q3 2025, a 41% increase from the prior quarter [1]. The construction pipeline has contracted to just 342,179 SF, which will limit future supply pressure [1].

TenantBase Activity [7]

  • Demand Share: Office accounted for 12.96% of total search volume [7].
  • Lease Term Preference: Demand is highly polarized toward short-term flexibility [7]:
    • Less than one year: 37.23% of deals [7].
    • 3-5 Years: 26.60% of deals [7].
    • 2-3 Years: 24.47% of deals [7].
  • Size Requirements: Tenants seeking shorter commitments prefer significantly smaller spaces. The average lower SF required for a Less than one year term is 979 SF, compared to 2,462 SF for a 3-5 Years term [7].

Industrial & Warehouse Market

Market Overview After several years of rapid expansion, the Atlanta industrial sector has shifted into a mid-cycle recalibration, with vacancy rising as new supply collides with softer demand [3].

  • Vacancy & Rent: Vacancy climbed to 8.4% in 2025, well above the 10-year average of 5.8% [3]. Asking rent growth has decelerated to 1.1% year-over-year, with prime infill locations still commanding premiums [3].
  • Demand & Supply: Twelve-month net absorption turned negative for the first time since 2011, dropping 453,000 SF [3]. Construction starts have fallen roughly 70% from the five-year average, which is expected to help tighten vacancies again by late 2025 or 2026 [3].
  • Investment: Industrial sales volume in the first half of 2025 was down nearly 30% compared to 2024, though data centers and last-mile assets continue to attract outsized investor interest [3].

TenantBase Activity [7]

  • Demand Share: Warehouse accounted for 22.35% of total search volume [7].
  • Lease Term Preference: Demand is balanced across mid-to-long terms [7]:
    • 3-5 Years: 33.33% of deals [7].
    • 1-2 Years: 29.49% of deals [7].
    • 2-3 Years: 17.95% of deals [7].
  • Size Requirements: The average lower SF required for a 3-5 Years term is 5,467 SF, while the 5+ Years term average requirement jumps to 35,625 SF [7].

Retail Market

Market Overview The Atlanta retail market shows signs of stabilization, with fundamentals remaining tight due to a limited construction pipeline [2].

  • Vacancy & Availability: The overall vacancy rate stood at 4.5% in Q3 2025, slightly up from the previous year but still below the historical norm of 5.3% [2].
  • Net Absorption: Demand remained negative at -178,190 SF in Q3 2025, though this represented an improvement over the more significant losses seen in Q2 [2].
  • Rental Rates: Average NNN asking rates dipped slightly to $19.18 per SF but remain elevated near all-time highs [2].
  • Construction: The pipeline remains constrained with 612,298 SF underway, a 42.9% decrease over the past year, which will limit expansion options for many tenants [2].

TenantBase Activity [7]

  • Demand Share: Retail/Storefront activity dominated with 65.93% of all search volume [7].
  • Lease Term Preference: Retail tenants show a strong preference for long-term stability [7]:
    • 3-5 Years: 30.34% of deals [7].
    • 5+ Years: 25.47% of deals [7].
    • 2-3 Years: 17.98% of deals [7].
  • Top Locations: Tenant interest is highly concentrated in the urban core and key growth corridors [7]:
    • Atlanta (Core): 6.79% of deals [7].
    • Gwinnett/I-85 NE: 3.83% of deals [7].
    • Decatur: 2.47% of deals [7].

Multifamily Market

Market Overview Multifamily remains a favored asset class for investors, with sales volumes in 2025 reaching their highest levels since 2022 [4].

  • Vacancy & Occupancy: The sector continues to work through supply, but vacancy is expected to remain elevated in the near term as the market digests the peak deliveries of 2024 [4].
  • Rents & Concessions: Rents have increased by 0.9% so far in 2025, marking the highest rate of growth since 2022 [4].
  • Construction: New construction starts have declined by nearly 50% between 2024 and 2025, signaling a future tightening of supply [4].
  • Investment: 60% of dry powder capital is currently targeting multifamily assets, with investors focusing on high-growth Sun Belt markets like Atlanta [4, 5].

2026 Outlook

Looking ahead to 2026, the Atlanta market is positioned for a rebound as the "recalibration" of 2025 concludes.

  • Investment Recovery: 70% of investors plan to acquire more assets in the coming year, driven by favorable pricing and improving fundamentals [5].
  • Supply Balance: With construction starts down significantly across Industrial and Multifamily sectors, vacancy rates are projected to tighten by late 2025 into 2026 [3, 4].
  • Sector Focus: Investors are prioritizing high-quality assets, with 75% focusing on multifamily and 37% on industrial & logistics [5].

Sources

  1. Partners Real Estate: Atlanta Office | Q3 2025 Quarterly Market Report
  2. Partners Real Estate: Atlanta Retail | Q3 2025 Quarterly Market Report
  3. Bull Realty: Atlanta Industrial Market 2025 Outlook
  4. Avison Young: US Multifamily Market Report | Q3 2025
  5. CBRE: Atlanta Among Top Targets for Commercial Real Estate Investment in 2025
  6. Swartz Co CRE: Atlanta's Commercial Real Estate Market Report 2025
  7. TenantBase Proprietary Market Data (Last 90 Days)

Information in this report is aggregated from various third-party sources and synthesized using artificial intelligence and other research tools. While we believe these sources to be reliable, we cannot guarantee the absolute accuracy or completeness of the data. This report is intended for informational purposes to provide market insight and should be independently verified prior to any use in a real estate transaction or legal commitment.