Using create_before_destroy

The order of operations that Terraform handles updates / deletes does not by default work the way that PAN-OS does things. In order to make Terraform behave properly, inside of each and every resource you need to specify a lifecycle block like so:

resource "panos_address_object" "example" {
    name = "web server 1"
    # continue with the rest of the definition
    ...

    lifecycle {
        create_before_destroy = true
    }
}

This will ensure that updates and deletes are processed in the correct order on PAN-OS.