Atlanta Industrial Due for an Upswing

ATLANTA-According to the Bureau of Labor Statistics, 4.6 million jobs were lost in the US in the 12 months ending in November, representing a 3.5% dip. The region with the most jobs lost over the past 12 months was the South, where employment declined by two million jobs, indicating a 3.8% loss.

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.