The fourth quarter of 2025 showed a mix of cautious investment activity and steady leasing demand across the Carolinas and Georgia. Investors and developers weighed market fundamentals like interest rates, absorption, and evolving tenant preferences as they made decisions heading into 2026.

Investment Activity: Buyers Staying Selective

Investment volumes in many asset classes remained steady but selective in Q4. Across the Southeast, interest rates continued to shape transaction activity, with many capital sources focusing on properties that offer stable income and long-term fundamentals rather than speculative plays. Higher borrowing costs kept some buyers on the sidelines, but core markets such as Atlanta and Charlotte still drew strong investor interest thanks to their population growth and broad economic bases. Regions with strong industrial and multifamily fundamentals remained attractive to institutional and private capital alike.

Leasing Trends: Industrial and Office Fundamentals

Industrial Leasing
Industrial leasing in Georgia — particularly Atlanta — and the Carolinas held up in Q4. In Atlanta, industrial net absorption remained positive, supporting demand for well-located logistics and distribution space. While overall rent growth has slowed from earlier peaks, core industrial submarkets near key transportation corridors continued to outperform, thanks in part to ongoing e-commerce and supply chain adjustments.

Office Leasing
Office markets showed signs of improvement in select submarkets. In Atlanta, multiple reports pointed to strong office leasing activity in 2025, driven by tenants seeking quality space with amenities that align with hybrid work trends. While some secondary office assets continue to face higher vacancies, prime buildings in core locations saw consistent tenant demand.

Development Trends: Supply Dynamics and New Projects

In both the Carolinas and Georgia, development activity remained responsive to market signals in Q4:

  • Charlotte’s industrial market recorded significant net absorption for 2025, suggesting that current industrial development continues to be absorbed even in softer conditions.

  • Developers in the Southeast balanced new starts with tighter construction pipelines, leading to a slower pace of new supply, which is expected to support vacancy tightening and potential rent growth once demand returns.

Across these markets, demand for development land — especially for industrial and multifamily use — remained grounded in long-term demographic trends, including population growth, strong job markets, and continued inward migration to Southern states.

What This Means for Investors and Developers

Be Selective on Price
With interest rates still elevated relative to earlier years, underwriting discipline is critical. Buyers are focusing on stabilized cash flow, realistic rent expectations, and conservative expense forecasts before committing capital.

Focus on Quality and Location
Core markets like Atlanta and Charlotte continue to benefit from strong economic fundamentals that support demand for investment, occupancy, and development. Retail and office assets with strong location advantages and tenant appeal are outperforming secondary options.

Industrial and Multifamily Still Key Drivers
Industrial and multifamily sectors remain leading investment targets in the Southeast. Industrial space continues to serve e-commerce and supply chain demand, while multifamily responds to population growth and workforce trends that drive housing needs. These sectors are attracting capital, even in more cautious conditions.

Looking Ahead

As we move into 2026, investors and developers are positioning for growth where fundamentals are strongest. With capital becoming more selective and markets shifting toward stabilization, the Carolinas and Georgia are expected to remain core targets for future investment — especially in sectors with strong demand drivers and resilient leasing fundamentals.