Atlanta Industrial Market Report

Demand normalizes amid continued supply infusion. Frenetic demand for industrial leases appears to be cooling across the Atlanta metro; just over 2.6 million square feet was absorbed on a net basis during the first three months of this year. This represents a marked slowdown from the previous 10 quarters, when a net of nearly 8 million square feet was taken off the market on average each period. The turn comes as inventory expansion continues at a rapid clip. Existing properties will have to contend with a large volume of speculative deliveries in the near future. Less than a quarter of the space in the 30-million-square-foot strong pipeline is accounted for as of June. While the immediate impact from these available floor plans will push vacancy up by its most rapid annual clip since 2009, the expected year-end rate will remain comfortably under the trailing decade-long average of 6.6 percent.