Atlanta CRE’s Fork in the Road: Navigating Capital, Class, and Culture Shifts

The commercial real estate (CRE) market in Atlanta is at a pivotal point. While high-interest rates continue to suppress overall transaction volume, the Atlanta CRE market is also showing distinct signs of a bifurcated recovery, an uneven economic rebound where the gains are split. The market breaks off in two distinct directions, with some sectors surging ahead while others struggle to keep pace.  

In Atlanta, this means a clear divide exists between thriving asset classes—namely Industrial and Class A Office—and struggling properties, particularly Class B Office and those facing significant maturing debt. For owners and investors, navigating this split is the critical factor for unlocking value in 2025 and beyond. Here are some insights based on what we’ve been seeing to help you make informed decisions in this complex environment. 

Refinancing and the “Maturity Wall” 

Financial conditions remain the primary driver of market activity, with the ongoing challenge of higher borrowing costs casting a long shadow over deal flow. The commercial real estate industry faces a massive “maturity wall,” with over $1.5 trillion in loans scheduled to mature across the U.S. by the end of 2026. Of this, upwards of $1 trillion in debt is set to mature in 2025 alone. Loans originated before 2022 often carried significantly lower interest rates. When these loans come due now, owners face the daunting prospect of refinancing at substantially higher rates. This scenario often forces property owners to inject new equity, sell assets at a discount, or face potential distress. 

While a potential drop in interest rates could ease refinancing pressure, savvy investors must recognize that the biggest opportunities often arise from market dislocations. Providing gap equity or acquiring well-located assets from owners unable to bridge this financing chasm presents a compelling strategy for real estate investment opportunities. 

The Office Dilemma 

When it comes to office space, the Atlanta CRE market is a prime example of the pervasive flight-to-quality trend, where investors move their capital from risky investments to more stable alternatives. The overall Atlanta office market continues to grapple with elevated vacancy rates, hovering around 25.0% – 26.5% as of Q3 2025. This figure, however, masks a distinct internal divide between Class A office assets and Class B: 

 

• • Class A: Demand is overwhelmingly concentrated in premium, amenity-rich buildings. In Q3 2025, Class A office space in Atlanta actually saw positive net absorption of over 236,000 square feet. This growth is likely a result of return-to-office mandates, where companies are consolidating into improved, modern spaces to justify the commute and attract employees back to the workplace. 

 

• • Class B: Conversely, older, non-upgraded Class B properties continue to bear the brunt of negative demand. These assets suffered a significant loss of -320,000 square feet of absorption in the same quarter. This signals that the future of the office market is not about less demand, but about highly concentrated demand in the best, most functional properties. 

Major firms like J.P. Morgan Chase are creating their own demand for office space. After mandating a five-day-a-week office return for thousands of previously hybrid employees in early 2025, JPM analysts shifted their focus to opportunistic buying. Their actions highlight that the market correction in non-premium office assets presents an opportunity for investors with high-grade capital and the ability to fill space. Their internal and external strategy confirms the market’s reality: by strictly enforcing return-to-office mandates, firms can create demand for office space while simultaneously eyeing the distressed assets created by the aforementioned market split 

For landlords of older office buildings, the message is clear: non-upgraded space is increasingly obsolete. The viable paths forward for Class B properties are either significant capital investment for modernization or strategic adaptive reuse to meet various Atlanta CRE market demands. 

Flexible Commercial Buildings Will Prosper 

For the first time since 2012, more office space will be removed from the Atlanta market than added, reinforcing that assets with flexibility are best positioned for the office space shakeup. Currently, 667,254 square feet of underperforming office space is undergoing conversion to multifamily, hotel, and mixed-use properties this year, dramatically exceeding the 250,000 square feet slated for new office delivery. 

Flex commercial spaces have been able to quickly adapt to the changing needs of businesses and have so far been able to avoid the high vacancy rates experienced by Class B office due to their versatility, despite being generally older stock. In fact, flex space has been in high demand due to its limited supply. 

Normalization in the Industrial Sector 

While overall economic uncertainty and decelerated job growth might suggest a slowdown, the industrial sector tells a crucial story of normalization after a period of historic, pandemic-fueled growth, rather than a recessionary collapse. Atlanta’s status as a premier logistics and distribution hub means the industrial market is fundamentally strong; however, it is transitioning from unprecedented tightness to a more balanced state: 

 

• • Balancing Supply and Demand: Leasing activity remains robust, with around 10 million square feet transacted in Q3 2025. Yet, the large volume of newly completed construction hitting the market has led to an expected increase in vacancy. The direct industrial vacancy rate has climbed to 9.0% in Q3 2025, reaching its highest level since 2014.  

 

• • Slowing Pace of Growth: While the average NNN rental rate continues its upward trajectory, reaching $7.32 per square foot in Q3 2025, the pace of growth is naturally moderating compared to the peak years of intense demand. This is a sign of a healthy, mature market adjusting to a more sustainable equilibrium. 

The Atlanta Industrial market remains stable, but developers must now exercise greater discipline. There has been a rush in 2025 to import goods from overseas to avoid tariffs. This may have contributed to a temporary demand spike and will be something to watch out for. Build-to-suit projects and highly strategic locations near major ports, rail lines, or key distribution nodes are still poised to outperform purely speculative development in the coming quarters. This sector is still a top priority for investors seeking income stability and portfolio resilience. 

Strategizing in Atlanta’s Selective CRE Market 

The overarching theme for Atlanta’s commercial real estate market is selectivity. This is likely a direct consequence of current economic ambivalence. While lackluster job reports show businesses have significantly slowed hiring, there has been no indication of mass firings either. This stability in workforce size means businesses remain unsure if their space needs will change, leading to a broader “wait and see” hesitation in the market—and fewer significant moves. 

Beneath this surface stagnation, however, the highest-quality assets in industrial and Class A office are still attracting capital and facilitating transactions. The key to navigating this bifurcated recovery lies in recognizing where the risks meet new opportunities. 

Distressed Property Owners Should Reach Out Early 

Property owners and lenders with debt maturing in the next 18–24 months and higher than normal vacancy rates should engage with an advisor now to avoid a forced sale, given that lenders are tightening standards and equity gaps are widening. Amidst the uncertainty and change, having an experienced real estate partner on your team can be invaluable. EpiCity has decades of experience working with property owners and lenders saddled with distressed property. Download our whitepaper on troubled assets and how to limit loss and maximize the odds of recovery. 

Partner with EpiCity 

The economic headwinds and stubbornly high rates are creating distress, which can translate into motivated sellers and optimum acquisition opportunities for well-capitalized buyers who can deploy capital decisively. The future of Atlanta CRE isn’t uniform; it’s nuanced and selective. Partner with EpiCity to ensure you’re positioned on the right side of this divided recovery.