Research & Forecast Report
Atlanta
Q1 2015 | Industrial
Atlanta Industrial Vacancy Lowest Since 2001
Market Indicators Relative to prior period
ATL Q1 2015
ATL Q2 2015*
VACANCY
Key Takeaways
NET ABSORPTION
>> Strong absorption activity continues to purge vacancy from Atlanta’s industrial market. The overall industrial vacancy rate is at its lowest point in 14 years.
RENTAL RATE
>> The lack of industrial space options in the market has continued to push rental rates higher. The average quoted rate has increased 12% since bottoming at the end of 2012.
CONSTRUCTION
CAP RATES *Projected
>> Industrial construction in Atlanta increased yet again despite deliveries totaling 1.6 million square feet in first quarter. >> Northeast Atlanta is currently Atlanta’s tightest submarket for bulk warehouse availability. At a vacancy rate of 3.5%, industrial prospects seeking 200,000 SF or more have few existing options. >> Atlanta’s industrial market is likely to see another record year of occupancy gains in 2015.
Atlanta Industrial Market Following a record-breaking year of absorption, Atlanta’s industrial market is off to a strong start to 2015 as occupancy levels increased for an 18th consecutive period. Industrial absorption totaled just over 3.7 million square feet in the first quarter. This amount is right around the average quarterly absorption over the past two years which has contributed to a 4.7% drop in Atlanta’s industrial vacancy rate during the same time. The largest occupancies in the first quarter were mostly from tenants ranging in size between 100,000-200,000 square feet. South Atlanta saw the majority of this type of space user take occupancy resulting in almost 2.4 million square feet being absorbed in the quarter, leading the Atlanta market. All in all, the positive activity pushed Atlanta’s overall industrial vacancy rate to its lowest point in 14 years. The last time vacancy was under 9%, the Atlanta industrial market was 80% of its current inventory. Tenant requirements are
ATL Market
ATL Warehouse
ATL Flex & Shallow-Bay
8.6%
7.9%
11.4%
-0.4%
-0.2%
-0.8%
Absorption
3.7
2.7
1.0
New Construction
1.6
1.6
-
18.1
18.1
-
Average Quoted
$3.77
$3.44
Change From Q4 2014
3.0%
2.1%
Year-Over-Year Change
6.5%
6.8%
Summary Statistics Atlanta Office Market
Vacancy Rate Change From Q4 2014 (Millions Square Feet) (Millions Square Feet)
Under Construction (Millions Square Feet)
Asking Rents
Per Square Foot Per Year SB Flex SB Flex SB Flex
$3.86 $7.84 2.9% 5.2% 7.8% 6.1%