Atlanta's industrial absorption was better than expected in the third quarter of 2019.
- Piggybacking off of last quarter’s return to average levels, the Atlanta industrial market experienced a stronger than expected third quarter, absorbing just over 6.2 million square feet.
- South Atlanta finished Q3 back in the top spot. The submarket saw big tenants such as PVH Corp (982,777 SF), Coca-Cola Bottling (415,000 SF), and CEVA Logistics (400,000 SF) take occupancy.
- For the first time in five quarters, Atlanta’s overall industrial vacancy rate saw a slight decline over the previous quarter; albeit by only 10 basis points (0.1%).
- The deliveries of Pendergrass Commerce Center and Bridgeport bring the number of 1 million-plus square foot buildings added to the market this year to 6. Currently, only one of these buildings is leased.
- The average industrial rent for Atlanta reached another record high this quarter increasing to $4.85/sf NNN.
- Atlanta is on track for a solid year of occupancy gains, and will meet the annual projected total of 13-14 million square feet absorbed.
Atlanta Industrial Market
Atlanta’s industrial absorption was better than expected in the third quarter with the net total topping 6.2 million square feet; the highest quarterly amount since this time last year. Additionally, as confirmed by Colliers International, Atlanta had the second highest amount of space absorbed nationwide in Q3, trailing only Chicago. This quarter’s positive results were tied to a number of anticipated occupancies, the largest being PVH moving into almost 1-million square feet in South Atlanta and Stitch Fix moving into 925,800 square feet in the I-20 West/Fulton Industrial submarket. In fact, these two submarkets were where most of the absorption activity occurred this quarter, collectively
accounting for more than 90% of the market’s total. As it relates to the size of tenants taking space in Q3, a strong number of move-ins between 100,000 to 400,000 square feet, and ample activity from smaller industrial users occupying under 100,000 square feet helped push absorption levels beyond the anticipated total. These two factors signify a healthy industrial environment despite some slowing of larger leases in the market.