April 2025 | Market Brief
Lower rates of job growth tested large U.S. markets in 2024, even in the big Sunbelt markets where rates of growth sank by 50% or more. Metro Atlanta added 44,000 jobs last year (1.4% growth), a moderate gain but well below its trailing 10-year trend. Despite the slowing rate of job additions, office market conditions are holding steady, and while it’s too early to declare a recovery, signs of a resurgence are on the horizon.
One trend to watch in 2025 will be small businesses growth. Atlanta’s share of small businesses grew by more than 92,000 in 2024, second only to Miami, and employed more than 1 million. According to the U.S. Small Business Administration (SBA), small businesses (generally defined as firms with fewer than 500 employees) have historically been responsible for around two-thirds of net new jobs created in the United States. Business and job growth, in conjunction with an expanding return-to-office (RTO) trend, provide inertia for office space demand.
It’s likely we’re at or near a bottom for Class A office product in growth markets like Atlanta. Fundamentals In Class A properties are holding steady, with healthy leasing activity, declining sublease space and steady rents. With valuations at a low point in the cycle, opportunistic investors are beginning to capitalize on current conditions in advance of future growth. Cousins Properties recently invested $1 billion acquiring office properties throughout the U.S. (including the Proscenium building in Midtown Atlanta) and the Braves Development Company purchased a six-building office complex in Cumberland/Galleria during the first quarter of 2025. Given the lack of new office construction, expansion of RTO and continued employment and business growth, the timing looks “just right” to be back in the office market.