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Five Fast Facts: Atlanta Industrial Real Estate Q2 2023

Christa DiLalo • 7/20/2023

Read our Five Fast Facts for more insight into the key trends that impacted the Atlanta industrial market during the second quarter. 

  1. 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.
  2. 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. 
  3. 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. 
  4. 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. 
  5. 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.  



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