ATLANTA-In an industrial market that’s still struggling to gain major traction, another consolidation resulted in a negative absorption deal for the metro Atlanta area. Although Sears Holdings/Kmart inked a 226,000-square-foot lease in Forest Park, the sum total of the whopping deal resulted in a net loss for the region.
Sears Holdings/Kmart is settling in at 5290 Old Dixie Highway in Forest Park, GA. Ray Stache, James Phillpott and Lisa Bosshardt-Pittman of the Atlanta office of Cushman & Wakefield represented Sears Holdings/Kmart. SPG Forest Park owns the building, the ultimate beneficiary of the consolidation.
“This location is across the street from the Kmart fashion distribution center,” Stache tells GlobeSt.com. “Kmart was already occupying a little more than half of the building. But they also had a secondary warehouse a little further south. We did an analysis to figure out the best option. The result was a renewal and expansion into this building.”
That leaves the facility in Morrow with a gaping hole and a net loss for metro Atlanta’s industrial market in this deal. Still, Atlanta’s industrial market continued to rebound from the recession with its third positive quarter of net occupancy gains according to CushWake’s latest MarketBeat Atlanta Industrial Report.
Year-to-date Atlanta absorbed more than nine million square feet of industrial space—that’s three times the year ago period. But leasing activity is still down. Stache describes the current market conditions as one of fits and starts.
“We’ve had some positive absorption this year, but it’s still very slow going as far as building real traction in the marketplace,” Stache says. “Not unlike the Kmart deal, you’ll see one large transaction and at the same time you’ll see a company of equal size giving up space. It’s a continual one step forward, one step back in the market right now.”
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