Sun Belt Office Landlords Lead the Charge in Post-Pandemic Recovery

Cousins and Highwoods REITs raised their 2025 financial forecasts thanks to solid performance in Sun Belt cities.

Jordan B.
August 05, 2025

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Good morning. Sun Belt office markets are heating up as landlords report stronger leasing, higher rents, and growing confidence in a post-pandemic rebound.

Today’s issue is brought to you by RSN Property Group—get a behind-the-scenes look at how hybrid multifamily deals are bringing institutional rigor to retail investors.

🎙️This week on No Cap podcast, Craig Deitelzweig of Marx Realty reveals how “hotelizing” office buildings is unlocking $50+ PSF rent premiums and rewriting the rules of tenant experience.

Market Snapshot

S&P 500

GSPC

6,238.01

Pct Chg:
-1.12%

FTSE NAREIT

FNER

753.55

Pct Chg:
-0.59%

10Y Treasury

TNX

4.216%

Pct Chg:
-0.144

SOFR

30-DAY AVERAGE

4.303%

Pct Chg:
-0.00

*Data as of 08/01/2025 market close.

SUN BELT BOOM

Sun Belt Office Landlords Lead the Charge in Post-Pandemic Recovery

Sun Belt office landlords Cousins Properties and Highwoods Properties are bullish on future growth, citing strong leasing demand, higher occupancy, and rising rents driven by corporate RTO mandates.

Sun Belt advantage: Cousins and Highwoods REITs raised their 2025 financial forecasts thanks to solid performance in Sun Belt cities like Atlanta, Dallas, Charlotte, Nashville, Tampa, Raleigh, and Orlando. They attribute this performance to strong demographic growth, pro-business climates, and resilient local economies.

RTO driving demand: Major employers such as Amazon, Dell, Starbucks, and Salesforce continue tightening in-person work requirements. A KPMG survey indicates about 85% of CEOs now expect a full return to a five-day workweek, up significantly from the 64% previously reported.

A tale of two markets: The office market is clearly split into two segments—a premium segment benefiting from strong leasing activity and improving occupancy, and a lower-tier segment continuing to struggle with high vacancies. CBRE reports premium office vacancies at around 13%, significantly lower than the broader market vacancy rate of 19%.

Tenants boost activity: Highwoods inked approximately 925K SF of leases in Q2, nearly half from new tenants, achieving cash rent growth of over 3.5% YoY. Cousins reported roughly 334K SF leased, with new or expanded leases making up 80% of activity, and rent growth hitting 5.5% YoY.

Positioned for strength: Major landlords like BXP, Kilroy Realty, and Vornado Realty share similar optimism, but Sun Belt-focused firms Highwoods and Cousins say their markets' strong fundamentals set them apart. Highwoods CEO Ted Klinck specifically highlighted Charlotte, Dallas, Nashville, and Tampa as standout locations.

➥ THE TAKEAWAY

Sun Belt advantage: Sun Belt cities' robust demographics, growing economic strength, and increased RTO mandates are boosting leasing volumes and occupancy rates, positioning landlords focused on premium office properties in these markets as clear leaders in a bifurcated office market recovery.

TOGETHER WITH RSN PROPERTY GROUP

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✍️ Editor’s Picks

Register now: Join 400+ multifamily investors at the 9th annual Old Capital Conference in Frisco, TX on October 8-9th. Meet listing brokers, lenders, and owners all in one-place. (sponsored)
Loan rebound: CRE lending jumped 66% YoY in Q225, with major gains in office, healthcare, and industrial.
Privatization push: Trump is meeting with top bank CEOs to explore selling the government’s stakes in Fannie and Freddie.
Opportunity map: Raleigh, Nashville, and Austin top the list of US cities where economic resilience is driving job growth and high earnings.
Hiring freeze: With just 73K jobs added in July and prior months revised sharply down, Moody’s and JPMorgan warn the US labor market may be stalling.
Mixed quarter: Q2 CRE sales rose 2% YoY, but a sharp 20% June drop and weak deal counts underscored continued volatility across sectors.
Reporting update: The FDIC and other federal regulators finalized Call Report changes requiring banks to disclose modified troubled loans for 12 months.

🏘️ MULTIFAMILY

Rent plateau: National rents stayed flat in July at $1,402, while vacancies hit a record 7.1%, reflecting a market still digesting a historic flood of new apartment supply.
Tenant tensions: ROFR laws are gaining ground, but landlords warn they delay deals, complicate financing, and shift leverage to tenants.
Leasing surge: US apartments saw record Q2 demand with 188,200 units absorbed, more than double the number of new completions.
Midwest moment: Rent growth and stable fundamentals are attracting investors to Midwest multifamily markets like Chicago, as capital pulls back from oversupplied Sun Belt cities.
Workforce housing: Spain’s Pablo Castro is launching a $880M, 4,000-unit Miami project with fixed rents for essential workers under Florida’s Live Local Act.
Asset unwind: Elme Communities is selling 19 multifamily properties to Cortland for $1.6B and plans to liquidate the rest of its assets.

🏭 Industrial

Warehouse tightness: Logistics-ready warehouse space is tightening despite higher vacancy rates, as pre-leasing accelerates and investors bet big on long-term demand.
Digital hub: CoreWeave acquired part of New Jersey’s NEST campus for $322M and plans to invest $1.2B to build a major AI-focused data center.
Blackstone refi: Blackstone secured a $1.4B loan to refinance a 67-property, 9.7M SF industrial portfolio across 10 states.
AI arms race: Big Tech is accelerating AI infrastructure spending, with Microsoft and Meta gaining investor favor while Amazon faces scrutiny over lagging cloud growth.

🏬 RETAIL

Urban appetite: NYC restaurant demand is surging, fueling retail revival and reshaping prime real estate.
Property revalue: NJ’s American Dream megamall just had $850M sliced off its tax assessment, cutting its 2025 valuation nearly in half.
Back-to-school: Parents plan to spend 17% more on back-to-school shopping, favoring mass retailers and in-person visits despite inflation.

🏢 OFFICE

Stake exit: Schroders wrote off its stake in A10 Capital as rising CRE distress and falling office values weigh on lenders.
Deal volume: Manhattan office leasing jumped over 10% in July, putting 2025 on track for its strongest year since 2019.
Rising star: Harrison Sitomer went from SL Green intern to CIO, helping steer the REIT’s Midtown office strategy.
Vertical victory: Lincoln and Kairoi have topped out Waterline in Austin—now Texas’ tallest tower—set to open in 2026.

🏨 HOSPITALITY

Casino countdown: With eight contenders and four months to go, NY's high-stakes casino race intensifies as developers court community support and navigate political hurdles.

📈 CHART OF THE DAY

In July 2025, the FTSE Nareit All Equity REITs Index fell 1.1%, lagging broader markets, while health care and telecom REITs led year-to-date gains with returns above 15%.