It comes as no surprise then that the Atlanta industrial market went through a major adjustment in 2009, recording the largest occupancy loss ever in a year. Tenants gave back almost 3.3 million square feet of industrial space over the past 12 months, according to a recent Colliers International report. Industrial vacancy in the city has increased 0.8% from 2008 and finished the year at 13.3%, the highest industrial vacancy rate ever recorded in Atlanta's history.

Given the city's dominance in both housing construction and population growth over the past decade, the economic downturn impacted the industrial market the most, explains Mike Spears, senior vice president and manager at Colliers. "The majority of Metro Atlanta jobs lost in 2009 were in manufacturing and construction, closely associated with the local housing market. Tenants in these industries found themselves no longer in need of their industrial spaces causing demand to plummet and vacancy to rise," he says. Still, pockets of demand remained. Food industry tenants--like Smuckers, Kraft and Trader Joe's--provided much of Atlanta's industrial leasing activity throughout the year, signing some of the largest deals in the region.

Although located just outside of the Colliers tracked industrial market, General Mills signed for a distribution facility of 1.5 million square feet, which was the region's biggest deal in 2009. "The company's decision on location further solidifies Atlanta as the major distribution hub in the southeast," says Spears.