ATLANTA—Atlanta's industrial market closed the third quarter of 2017 with 3.8 million square feet of positive net absorption and a total vacancy rate of 7.8%. The average asking lease rate, $4.50 per square feet, is the highest in the last 15 years.
That's according to CBRE Research. The firm just released its third quarter 2017 data on the industrial commercial real estate market in the Atlanta area.
With a year-to-date net absorption of 17.2 million square feet, 2017 has already surpassed net absorption numbers for the entirety of 2016 with one quarter remaining. As a direct result of increased absorption numbers, rental rates rose an average of 8% year-over-year and 30% overall since the third quarter of 2014.
“With nearly 25 million square feet of net absorption over the last five years, the South Atlanta submarket accounts for more than one-third of metro Atlanta's total absorption during this period,” Dan Wagner, Southeast Divisional Research Director for CBRE, tells GlobeSt.com. “The rapid expansion of the Port of Savannah, which is experiencing record-setting cargo volumes, has greatly contributed to the region's success.”
Atlanta's post-recession construction boom continued in the third quarter of 2017, with the addition of 6.3 million square feet of space into the market. Approximately 2.3 million square feet of new product was delivered pre-leased, a positive sign for tenant demand.
As more than 10 million square feet of speculative industrial space will be delivered over the next three quarters, supply in the market will alleviate some of the pent-up demand within the market. The most active industrial submarket continues to be the South Atlanta area.
According to the Georgia Ports Authority, the Port of Savannah is the fourth busiest and the fastest growing US container port, and the Port of Brunswick, located approximately 80 miles to the south, is the nation's busiest seaport for automobile imports. The following are highlights of the report.
- Through three quarters, net absorption surpasses 2016
- Asking rates have increased year-over-year by 8.9% to $4.50 per square foot
- Total Vacancy: 7.8%
- Net Absorption: 3.8 million square feet
- Construction: 16.9 million square feet
- Deliveries: 6.4 million square feet
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