The industrial market in Atlanta continues to surge. The metro benefits from its role as a regional and national distribution hub, the growing Port of Savannah, and strong local demographic growth. Vacancies have begun to tick up slightly in recent quarters but are still well below the metro’s historical average. Sustained low vacancies have kept pricing power in the favor of landlords, and rent growth continues to outperform the national benchmark.
Demand for logistics space is expected to stay strong, but speculative supply is mounting, and vacancies are already starting to rise, albeit slowly. Speculative deliveries should continue to put upward pressure on vacancies, with about 80% of the 15,500,000 SF underway is available for lease, representing one of the largest speculative supply pipelines in the country. Submarkets south of Atlanta should take the biggest hit to vacancy increases. However, if recent leasing trends persist, any rise in vacancy should be relatively gradual. Investors continue to flock to industrial assets in Atlanta, with the market setting a new record for sales volume each of the past two years. Pricing continues to appreciate, with average sales now coming in at roughly $65/SF.