Skip to main content Skip to footer

Atlanta industrial continues on positive course in 2019

Download Report
Hero Image2019Industrial

Stronger than expected absorption in Q4 helped push the Atlanta industrial market to yet another robust year.

Key Takeaways

  • Continuing a string of solid annual gains, the Atlanta industrial market absorbed 15.9 million square feet of space in 2019.
  • Yet again, South Atlanta dominated the year, leading the market with 6.8 million square feet of positive space absorption. Also, Northeast Atlanta posted its strongest year since 2017 thanks to occupancy gains in the Jackson County area of the submarket.
  • The overall industrial vacancy rate increased for the first time in three years; though this was anticipated. Despite the strong absorption, new deliveries outpaced demand as Atlanta's inventory grew by 21.5 million square feet this year.
  • Construction activity remains above the 20 million square-foot market for the seventh consecutive quarter. The majority of product currently in development is in the 300k-500k square-foot range.
  • With the overall average increasing 4.3% from 2018, industrial rents are up for a seventh straight year. Bulk rents are up as well; however, the average is beginning to idle.
  • Solid demand fundamentals should procure yet another strong year of activity in Atlanta's industrial market in 2020.

Atlanta Industrial Market

Stronger than expected absorption in Q4 helped push the Atlanta industrial market to yet another robust year. Net industrial absorption totaled 15.9 million square feet in 2019, moderately higher than the anticipated total between 13-14 million square feet.

The year was filled with numerous occupancies and expansions, though industrial tenants between 300k-500k square feet dominated the landscape. Combined, tenants of this size accounted for a third of the occupancy gains in the year.

Additional, leasing activity was highest from companies seeking 500k square feet or less over the past twelve months. There were also a few large, notable move-ins to occur. GE Appliance's occupancy of its 1.1 million square-foot distribution center in the Northeast Atlanta submarket was the largest, and the only occupancy above 1-million square feet in the year; a stark contrast to lat year's activity. 

Outlook

In stark contrast to last year where activity over 1-million square-feet was at record levels, 2019 will be noted for the smaller industrial tenant which provided much of the positive activity throughout the year. Looking closer at the data, companies moving into 200k-500k square feet account for 45% of total net industrial absorption during the past twelve months.

Likewise, the majority of leasing activity in the year feel into this space category. While demand continues to signify an expansionary environment, it is not enough to keep up with the onslaught of new vacancy added from large industrial projects.

2019 saw the most industrial space delivered since 2016. Over 65% of this space remains available for lease. Looking ahead to 2020, another 17 million square feet of new inventory is expected, only 16% of which is leased or in build-to-suit projects.

It is likely supply will outpace demand yet again in the coming year leading to more vacant space added; however, the Atlanta market is still expected to see solid occupancy gains in 2020. 


4Q19_Industrial

Atlanta industrial continues on positive course in 2019

Download Report
Related Experts

Harrison Marsteller

Senior Vice President, Principal

Atlanta

Harrison Marsteller began his career at Colliers International in Atlanta soon after graduating from University of Alabama with a BBA majoring in Finance and economics. Harrison joined the team of Sean Boswell, Darren Ross and Scott Plomgren, a team of industrial professionals with over 35 years of experience and 90,000,000 SF transacted. 

Harrison’s area of interest and expertise is primarily the Atlanta industrial market, particularly the I-20 West and Northeast Atlanta submarkets.  Harrison provides his clients with site selection, market research, financial analysis, and transactional services including leasing and purchasing new space and subleasing or selling excess space.

Harrison’s focus and dedication to meeting his clients’ needs provides him the ability to deliver outstanding service to both landlords and tenants.

 

 

View expert

Scott Plomgren

Senior Vice President, Principal

Atlanta

 Scott began his real estate career in 2002 with McWhirter Realty Partners, a local Atlanta brokerage firm. Scott has experience partnering with both local and national clients.  Transaction history includes build to suits, site selection, & acquisitions and dispositions on both lease and sale basis. Noteworthy clients include MOL Logistics, MS International, Excel Foods, Wickmann USA, General Paper Goods and Audio America.

View expert