Southern Company’s natural gas division is moving its Atlanta headquarters in the largest office lease signing so far this year.
Southern Company Gas signed a 264,300 square-foot lease at Midtown Center II, an eight-story office building at 725 W Peachtree St., company spokesman Jeff Wilson confirmed to The Atlanta Journal-Constitution. The natural gas division will vacate its current offices at 10 Peachtree Pl., which is only a half-mile north of its new headquarters.
The transaction adds to an office market that is slowly starting to heat up in metro Atlanta after several slow years spurred by the COVID-19 pandemic’s effects on workplace culture.
Since 2020, office lease signing activity has been tepid, leading to a record amount of vacant and unwanted space clogging the market. Nearly a third of all office square footage in metro Atlanta was available to rent at the end of March, according to real estate service firm CBRE. However, the first three months of 2024 saw the most office leasing activity since 2020 at the start of the COVID-19 outbreak, serving as a sign of optimism for landlords and brokers.
Credit: Google Maps
Credit: Google Maps
The lease signing by Southern Company Gas adds to that growing momentum. It also surpasses the 209,000 square-foot lease renewal signed by Manhattan Associates in Cobb County to become the region’s largest lease transaction of 2024 so far.
CBRE Investment Management owns Midtown Center II and its sister building, which combine for 800,000 square feet of workspace. CBRE declined to comment about the new lease signing.
The 20-story 10 Peachtree Pl. tower will be nearly vacant once Southern Company Gas vacates its current offices, according to real estate publication Bisnow.
With current workplace trends, most companies are reducing their amount of office space in response to long-term hybrid work schedules and lower office utilization.
However, the number of large lease signings is beginning to increase.
Southern Company Gas will slightly increase its office footprint as a result of its move, adding 5,000 additional square feet.
So far in 2024, five leases of at least 100,000 square feet have been signed in metro Atlanta, according to Cushman & Wakefield, while only one lease of that size was signed during the same period last year. Only one of those leases — the Georgia Department of Revenue’s 118,000 square-foot signing in Chamblee — was outside of Midtown and Buckhead.
Cushman & Wakefield analysts credit the lease signings, in part, to an uptick in return-to-office mandates by large employers. Atlanta-based UPS and NCR Voyix both announced strict in-person office policies earlier this year.
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