Read our Five Fast Facts for more insight into the key trends that impacted the Atlanta industrial market during the second quarter.
- Material Shortages Drive Construction Delays: - 6.7 MSF of new W/D, flex, and data center product delivered this quarter as developers were forced to extend their timelines on dozens of projects. More than 50.6 MSF of construction projects remains underway.
- Average Rent Continued to Climb: - Asking rents increased further in Q2, with the average rent for all industrial property types rising to $6.77 PSF. The W/D rate climbed 26.8% YOY to $5.45 PSF. W/D vacancies 300,000 SF+ averaged $4.59 PSF while smaller spaces average $6.06 PSF. Annual rent escalations are now frequently in the 3.5-4% range, up from the 2-2.5% norm several years ago.
- Vacancy Falls Further: - The vacancy rate fell below the 3% mark for the first time in market history, dropping to 2.7%. Across all of Metro Atlanta, only seven opportunities with immediate vacancies exist for tenants seeking spaces 300,000 SF or larger.
- National Leader of Absorption: - More space was absorbed in Atlanta during Q2 than any other market in the country. With 11.7 MSF of Q2 occupancy gains, the metro recorded a YTD total of 18.6 MSF of net absorption.
- Demand Remains Robust: - New leasing activity totaled 12.1 MSF. This marks the sixth consecutive quarter of 10 MSF+ in new demand and represents an 18.0% increase over Q1 leasing.