“All indicators point to the market being able to do that, but if it doesn't we could quickly have some spec buildings sitting vacant for a while,” Stache says. “It's a double-edged sword. There's certainly good news coming out of Atlanta's industrial market, but there could be a storm on the horizon depending on how long this cycle continues.”

Atlanta had 6.27 million sf of completions in the first quarter, the fourth most ever recorded. In spite of the deliveries, there is still 15.48 million square feet of industrial space under construction, the largest of which is a speculative warehouse and distribution center on Anvil Block Road that has the potential to be 1.47 million square feet Investment sales also made a strong showing in the first quarter with 6 million sf of industrial product trading hands. The positive signs from the first quarter point to a strong remainder of 2017.

ATLANTA—The Atlanta industrial market experienced a record-breaking first quarter with a significant amount of overall net absorption, a falling vacancy rate and an increase in overall asking rents. That's according to Cushman & Wakefield's first quarter industrial market report.

Metro Atlanta experienced nearly 6.4 million square feet of positive absorption, the highest amount ever recorded in Atlanta's history. The previous record of 6.15 square feet was set in the fourth quarter of 2014. The Interstate 20/Fulton industrial submarket saw the highest level of absorption with 2.6 million square feet of overall net absorption.

“In Atlanta, we have experienced significant demand for all industrial classes and product types but the development pipeline is keeping up,” Ray Stache, senior director at CushWake, tells GlobeSt.com. “Q1 was a big quarter, with 15.48 million square feet in production, leasing of big blocks has to continue at a very healthy pace in order to keep our vacancy from climbing again.”

Overall asking rents jumped from $4.20 per square foot to $4.31 per square foot quarter-over-quarter, the highest since the second quarter of 2003 when asking rents reached $4.35 per square foot. Meanwhile, vacancy dropped from 9% to 8.7%. The biggest lease signed was Wayfair's 846,496-sf deal at King Mill Distribution Park, followed by Google's data center expansion of 400,000 sf for a total of 898,355 sf at 310 Riverside Parkway.

“All indicators point to the market being able to do that, but if it doesn't we could quickly have some spec buildings sitting vacant for a while,” Stache says. “It's a double-edged sword. There's certainly good news coming out of Atlanta's industrial market, but there could be a storm on the horizon depending on how long this cycle continues.”

Atlanta had 6.27 million sf of completions in the first quarter, the fourth most ever recorded. In spite of the deliveries, there is still 15.48 million square feet of industrial space under construction, the largest of which is a speculative warehouse and distribution center on Anvil Block Road that has the potential to be 1.47 million square feet Investment sales also made a strong showing in the first quarter with 6 million sf of industrial product trading hands. The positive signs from the first quarter point to a strong remainder of 2017.