Read our Five Fast Facts for more insight into the key trends that impacted the Atlanta industrial market during the second quarter.
- Manufacturing Growth on the Rise:
Following major announcements by Rivian and Hyundai Motor Group/SK On for their advanced manufacturing plants in Georgia, others are following suit. In Q2, 10 manufacturers signed deals in the 100-300-ksf range— totaling 1.7 msf of space.
- Leasing Stabilized:
Despite softening demand and tenant right-sizing, quarterly activity reached 6.6 msf of new leasing in Q2— the fourth highest leasing of any metro in the U.S. The I-75 North Corridor boasted the largest share of new leases, making up 30.6% of Atlanta’s total.
- Vacancy Increased but Below Historic Average:
Direct vacancy grew modestly to 4.0% in Q2 but remained well below the historic average. Stone Mountain/Decatur and I-85 South maintained the lowest vacancy rates in the metro at 1.5% and 2.0% respectively.
- W/D Rents Continued Upward Trajectory:
Warehouse/distribution rates increased 22.5% annually to $6.48 psf, fueled by a wave of new supply in Airport/South Atlanta and the I-75 South Corridor. Airport/South Atlanta rents climbed 41.6% while I-75 South recorded a 37.8% increase.
- Construction Starts Came to Standstill:
Atlanta recorded zero construction starts for the first time in recent history. Amidst softening demand and a wave of speculative construction projects slated to deliver over the next 6-9 months, developers have begun to halt planned projects.