Two of Metro Atlanta’s largest office landlords, Cousins Properties and Highwoods Properties, are piercing the yearlong gloom over the office market with news that they’re quite busy.
In fact, things are so busy, Cousins has ended talks with embattled coworking giant WeWork to renegotiate its lease at a tower in Midtown Atlanta, choosing instead to take the space out to market, Cousins Executive Vice President Richard Hickson said during a Feb. 8 earnings call.
“Regarding 725 Ponce in Atlanta, due to strong demand from multiple traditional office users, we have decided not to negotiate with WeWork at this location and expect the lease to be rejected,” Hickson said.
WeWork occupies 45K SF across two floors at 725 Ponce.
Hickson said Cousins, the city’s largest office owner at 8M SF, is in talks to modify WeWork leases at Terminus in Buckhead and 120 West Trinity in Downtown Decatur, reducing the locations by about 26K SF each and cutting rent.
“I would note our negotiations with WeWork are ongoing and have been very fluid today,” he said.
The demand behind WeWork’s 725 Ponce space, located in one of Atlanta’s hottest office submarkets over the past decade and next to the iconic Ponce City Market, is not an outlier in Metro Atlanta. Leasing activity in the fourth quarter of last year and thus far in Q1 belies the performance of the office market in 2023.
The office market posted negative net absorption of 3.8M SF last year, pushing total availability, both direct and sublet space, to an all-time high of 32.2%, according to Avison Young.
But Cousins leased 217K SF in Q4, it reported during the earnings call.
“I…
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