As the world continues to grapple with the aftermath of the COVID-19 pandemic, the office market in major cities has been one of the hardest-hit sectors. However, in the Southeast, particularly in cities like Atlanta, there seems to be a glimmer of hope as companies start to return to the office and leasing activity picks up.
Cousins, a real estate company that primarily operates in Sunbelt cities like Atlanta, has reported positive trends in the Southeast’s office market. Despite the challenges posed by remote work and economic uncertainty, Cousins executives are optimistic about the region’s ability to bounce back quicker than other parts of the country.
Several major companies with a significant presence in Atlanta, such as UPS, Truist, and NCR Voyix, have recently announced return-to-office mandates that require employees to work from a physical office five days a week. This move signals a shift towards a more traditional work setup and is a positive sign for the office market in the region.
Leasing activity in Atlanta has also seen a significant uptick, with more than 2.2 million square feet of office leases signed in the first quarter of this year. This marks the most activity to start a year since the beginning of the COVID-19 outbreak in 2020. Cousins, in particular, reported a 57% increase in office lease signings compared to the same time last year, signing 404,000 square feet of office space in the first quarter.
According to Cousins Executive Vice President Richard Hickson, a quarter of the company’s first-quarter lease signings were expansions, with system software firm Workday doubling its office footprint at 3350 Peachtree in Buckhead. This expansion is seen as a validation of Atlanta’s appeal as a top destination for attracting and retaining talent.
However, not all news is positive for Cousins, as the company expects to lose some of its occupied space due to co-working company WeWork’s pending Chapter 11 bankruptcy proceedings. Cousins currently houses four WeWork locations totaling about 169,000 square feet in Atlanta and Charlotte. While the company has agreed to modify the lease at one location in Buckhead, Cousins is preparing for the rejection of the lease at another prime location near Ponce City Market.
Despite these challenges, Cousins reported a net income of $13.3 million in the first quarter, albeit a 40% decrease from the same quarter in 2023. The company’s stock price remained relatively stable, with a slight dip from the beginning of the year.
Overall, the outlook for the office market in Atlanta and the Southeast appears to be improving, with companies returning to the office and leasing activity on the rise. While challenges remain, the region’s resilience and ability to adapt to changing circumstances bode well for its future recovery.