Atlanta 1Q Industrial Vacancy Lowest in 20 Years
“Although 2018 is likely to see the highest level of new deliveries on record in Atlanta, we expect to see more record-low vacancies and moderate rent growth,” says Transwestern's Keith Pierce.
ATLANTA, GA—Atlanta posted a 6.3 percent industrial vacancy rate during first quarter 2018, the lowest level since 1995, due to strong demand significantly outpacing supply. With 3.3 million square feet absorbed in the first quarter—despite 5.6 million square feet of industrial product deliveries—research by Transwestern indicates a solid start to 2018.
“It’s remarkable to see a continued vigorous decline in vacancy in the midst of so much development,” says Julian Brown, Transwestern principal. “During first quarter, South Atlanta once again led the market in demand and, not coincidentally, saw the highest levels of new construction.”
First quarter 2018 reported 14.2 million square feet of industrial supply under development throughout Atlanta. Robust demand and the resulting construction have pushed asking rents to an average of $4.11 per square foot, the highest in the metro since 2001. The average sale price also increased to $57 per square foot, up 5 percent from the previous 12-month period.
“Although 2018 is likely to see the highest level of new deliveries on record in Atlanta, we expect to see more record-low vacancies and moderate rent growth,” says Keith Pierce, Transwestern director of research for the Southeast US. “Expanding distribution networks to support e-commerce and last-mile delivery are likely to maintain demand for the next several years.”