Economic Overview
Savannah’s economy showed modest but durable growth through Q3 2026, supported by logistics, manufacturing, and construction activity, despite short-term volatility. The Port of Savannah remains the region’s primary economic driver, handling 3.87 million twenty-foot equivalent units (TEUs) through August 2026, on pace with 2025 despite trade and tariff uncertainty. Despite headwinds from the late-2025 closure of International Paper’s Savannah and Riceboro mills, which resulted in approximately 1,100 job losses, the broader labor market has remained resilient. While regional economists project slower growth through year-end 2026, the long-term outlook remains favorable, anchored by port expansion, continued industrial investment, and sustained population growth across the Savannah MSA.
Supply And Demand
Savannah’s office pipeline remains largely prospective, with limited new supply currently under construction. Several proposed developments—including the 25,000-sf Class A project at 25 Lincoln Street, the Forsyth Park office site, and approximately 200,000 sf of planned space in Eastern Wharf—are in various stages of planning or pre-development, with construction timelines still uncertain. Construction continues on the 17,600-square-foot Savannah Harbor Gateway Office on Hutchinson Island, which is expected to deliver in October 2026. Market fundamentals softened in Q3 2026, with overall vacancy rising 30 basis points to 4.1%. Net absorption totaled -11,472 square feet during the quarter, driven by the non-CBD, where Class A vacancy climbed to 16.7%. Year-to-date net absorption stands at -13,551 square feet, while year-to-date leasing activity reached 99,186 square feet.
Pricing
Asking rental rates continued to trend upward in Q3 2026, with the overall average asking rent reaching $35.54 per square foot across all classes, up 2.3% from a year ago. Non-CBD rents led the increase at $35.94 per square foot, while CBD rents rose to $34.40. Despite rising vacancy and negative absorption, pricing remains supported by the market's tight supply. Looking ahead, rental rates are expected to remain stable to moderately increase through the remainder of 2026, particularly for well-located, high-quality office properties.
