- For a 28th consecutive period, Atlanta’s industrial absorption finished the quarter in positive territory. Q2’s net total of 3.7 million square feet was comparable to the first quarter and brings the year-to-date total to just under 7 million square feet.
- South Atlanta continues to dominate the Atlanta industrial market. To date the submarket has accounted for 70% of net absorption. It also comprises almost half of Atlanta’s industrial space currently under construction.
- Following first quarter’s uptick, the industrial vacancy rate in Atlanta declined by 20 basis points (0.2%) this quarter. There were fewer deliveries in Q2 which helped keep the amount of vacant space added manageable.
- Construction activity now sits at almost 20 million square feet on account of more projects breaking ground this quarter.
- Average industrial rents increased by their largest margin since 2003. Mid-Year 2018’s average quoted rate of $4.52/sf is Atlanta’s highest since being consistently tracked.
- Despite some concerns, Atlanta is on track to finish the year strong, absorbing a total of 15 million square feet of industrial space in 2018.
Atlanta Industrial Market
With the first half of the year complete, Atlanta continues to post steady industrial growth as positive market fundamentals persist. This quarter, occupancy increased by a total of 3.7 million square feet resulting in Atlanta’s 28th consecutive period with more tenants moving into than moving out of space. The positive results push the overall industrial vacancy rate below 7% yet again which is among the lowest it has ever been. Like the first quarter, South Atlanta continues to dominate activity, leading the market in both space absorption and leasing. Additionally, almost half of the industrial product currently under construction is located in the submarket. Larger tenants taking occupancy in Q2 were those with leases signed within the past six months. At the top of this list was Vert Logistics which moved into 759,300 square feet at Liberty Distribution Center. The fulfilment company took over space previously occupied by Georgia-Pacific and GENCO, and filled a sizeable void that had been on the market for a while. Another notable move-in this quarter was S&S Activewear which took occupancy of 505,000 square feet at Midland Logistics Center. Both of these moves took place in the I-75 South/Henry County section of South Atlanta which has seen much interest from industrial tenants over the past year.