Sun Belt-focused office landlord sets post-pandemic leasing record

Article originally posted on CoStar on May 2, 2025

A barren construction pipeline and increasing clarity over future real estate needs has meant companies are setting aside any broader economic concerns in order to plant a stake in the premium office market.

The owners behind properties at the highest end of the market are setting new post-pandemic leasing records, with Atlanta-based Cousins Properties the latest to report a sharp spike in deals as executives point to the emerging sense of urgency among prospective tenants as they shop for a dwindling pool of available space.

That demand helped fuel just shy of 540,000 square feet of deals through the first few months of the year, a figure Colin Connolly, Cousins’ CEO and president, said was “the most we have leased during a first quarter since 2019” and enough for the Sun Belt-focused landlord to raise its financial guidance for the remainder of the year.

“With new construction at historic lows, office fundamentals in our Sun Belt markets are improving,” Connolly told investors on the company’s earnings call Friday. “Demand remains robust, leasing is strong, and as we believe vacancy is reaching a peak, market tightening is not far off in the lifestyle sector. Return to office is transitioning to a return to normal.”

That building sense of optimism has been shared among other landlords across the United States as many have said the post-pandemic office market has officially bottomed out.

BXP, for example, reported a 25% spike in the volume of deals it signed through the first quarter compared to the same period in 2024, a signal that tenants are willing to set aside any macro uncertainties and are prioritizing their commitments to physical space. Related Cos. is said to have landed a prelease agreement in New York City with accounting giant Deloitte that is expected to fill 800,000 square feet of the developer’s 1.2 million-square-foot 70 Hudson Yards tower, a project that has yet to even break ground but would be one of the country’s largest ground-up office developments since the beginning of the pandemic.

Over the past couple years, U.S. office landlords have pointed to their lineup of top-tier properties as a saving grace from the occupancy and leasing pitfalls plaguing owners of lower-quality assets.

While the cohort of companies signing new office deals has shrunk considerably since the pandemic’s 2020 outbreak, the tenants that are willing to commit to space have homed in on high-quality real estate options as a tool to both aid in their return-to-office strategies and to help boost and retain talent.

To be clear, the overall health of the office market falls into two distinct camps: a stable and strengthening premium segment versus a struggling and financially stressed lower-tier one. For BXP, its portfolio of high-end office space has benefited as vacancy rates for the upper tier of the segment is about 13% compared to roughly 19% for the rest of the market, according to CBRE data.