When leaders of the accounting firm Moore Colson met to consider company office needs, they knew signing a long-term lease would be a roll of the dice.
Hospitalization rates for COVID-19 are slowing but still high, vaccines for children are in the near future, and society seems to be settling into a tense acceptance of the virus, but there’s still no consensus on whether workers should or will be willing to return regularly en masse to offices. Despite the uncertainties, an increasing number of companies are taking the plunge by signing leases, helping soak up available office space, which is at its highest levels in Metro Atlanta since the Great Recession.
“We discussed doing more hoteling or more virtual work, but decided we wanted to get our people back in the office,” said company partner Steve LaMontagne. “It’s a financial risk but, in our case, we were willing to take it.”
Moore Colson added space, boosting its total to about 41,000 square feet, and signed a 15-year lease at 600 Galleria in Cobb County. It is in the process of bringing its workers back in.
Tenants in metro Atlanta took or renewed 2.1 million square feet of leased office space for the three months ending Sept. 30, which is up 50% from the same period last year, according to brokerage firm Savills. That’s the highest level since December 2019.
Visa, which operates one of the world’s largest payment networks, last month agreed to lease an undisclosed amount of space at the former Norfolk Southern building in Midtown. The law firm Swift Currie this month leased 100,000 square feet at another Midtown office building.
Aluminum maker Novelis and software company TaxWise also signed office leases for more than 85,000 square feet in the past three months. Others leasing large blocks include robotic surgical equipment maker Intuitive in Peachtree Corners and RoadSync, a logistic software provider in Midtown.
Some have particular reasons for committing to in-office work, saying their workers do best in an office-based collaborative setting, or they need space for medical equipment, said Rob Binion, a senior director at brokerage firm Lavista Associates.
RoadSync CEO Robin Gregg said its workers need to learn its procedures in person.
“It’s a lot more efficient and happens faster if they come into the office,” she said.
Even with the uptick, the amount of available office space in metro Atlanta was at a 10-year high of 26.4% as of Sept. 30, according to Savills. That compares to the national average of 22.7%.
“Most companies are struggling with their decisions on office space,” Binion said.
Companies that were downsizing or those choosing not to bring workers back yet have added to the surplus square footage, and some are putting their spaces out for rent.
AT&T vacated more than 5 million square feet of Atlanta office space before the pandemic.
When State Farm’s multitower complex was completed in Dunwoody during the pandemic, it pulled workers out of buildings from across the metro area, Binion said. Then it sent many home to work after the pandemic hit.
Now, State Farm, one of the world’s largest consumer-focused insurance companies, will sublease about 600,000 square feet of that shiny new complex to Carvana, the online car seller, State Farm has decided that either a hybrid model, or working from home year-round, is the way to go.
“State Farm has said their employees can work from home and be productive,” Binion said. “Carvana said they do need the space.”
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