Atlanta Office Conversions to Exceed New Construction in 2025

More office space will be removed from Atlanta this year than added to it for the first time since 2012, highlighting the market’s stabilization, according to a new report from CBRE.

Currently, 667,254 sq. ft. of office space in Atlanta is undergoing conversion or partial conversion to multifamily, hotel and mixed-use properties, while developers are only slated to deliver 250,000 sq. ft. of office space this year. This trend is in-line with the broader U.S.: CBRE’s analysis of office-market activity across the largest 58 U.S. markets found that 23.3 million sq. ft. of space is slated for demolition or conversion, exceeding the 12.7 million sq. ft. of office space projected to complete this year.

The crossing of these trends has been years in the making. In Atlanta, construction completions have steadily declined from 3.5 million sq. ft. in 2018 to 1.1 million sq. ft. last year and the anticipated 250,000 sq. ft. this year. Meanwhile, an anticipated 667,254 sq. ft. is scheduled for conversion this year, and developers currently have another 2.8 million sq. ft. of office space in the pipeline for conversion or partial conversion to other uses in the coming years.

Various other indicators depict an office market that’s slowly turning the corner. Atlanta’s net absorption – the amount of demand in the market versus the amount newly vacated space – has steadily improved in the past three quarters. Net absorption fell to -30,000 sq. ft in the first quarter as net move-outs slowed from a two-year high of -1.5 million sq. ft. in Q1 of 2024. At the same time, office-leasing activity held steady in the quarter, with 2.2 million sq. ft. in deals signed – 66% of which were new leases or expansions.

“Atlanta is experiencing an uptick in office conversion/redevelopment, with numerous buildings in Atlanta’s Central Perimeter submarket recently demolished to make way for multifamily development,” said Will Yowell a Vice Chair with CBRE in Atlanta. “This is a similar trend to what the Central Perimeter experienced in the early 2000’s when over 2.5 million square feet of low-rise office was demolished for the construction of multifamily and retail properties.”

CBRE has tracked office conversions and demolitions nationally since 2018. Construction completions across all markets tracked handily exceeded conversions and demolitions in each year until 2025. Completions likely exceeded conversions and demolitions prior to 2018, given that office construction was robust and conversion activity minimal in past decades.