Metro Atlanta Industrial
Q1 2022
Rates Rising and Construction Booming despite Atlanta Industrial’s Slow Start to 2022
ABSORPTION, DELIVERIES AND VACANCY RATE
After a record-breaking Q4 and 2021, the Atlanta industrial market got off to a slower start in 2022, with positive absorption of over 2.6 million square feet in Q1. While still a positive indicator for the Atlanta industrial market, this is the lowest quarterly absorption figure the market has posted since Q1 2020. The market’s overall vacancy rate rose 70 basis points (0.7%) in Q1, finishing at 4.0%. Despite the rise, this is still the second-lowest vacancy rate in the past 20 years. Rental rates rose 5.3% to $5.14 in Q1 and have risen 12.2% over the past year.
45,000,000
8%
40,000,000
7%
35,000,000
6%
30,000,000
5%
25,000,000 4% 20,000,000
Atlanta’s industrial construction pipeline has continued its record-setting growth, with 123 buildings totaling over 44 million square feet under construction as of Q1. This is the most under construction square footage that the Atlanta market has ever seen. 16 buildings totaling 7.6 million square feet delivered in Q1, while a further 27 broke ground. The eventual deliveries of these buildings should relieve some of the tight vacancy rates seen in certain submarkets, such as I-20 West/Fulton Industrial, where the vacancy rate is a microscopic 1.9%.
3%
15,000,000
2%
10,000,000
1%
5,000,000 0
2017
2018
2019
Absorption
2020
Deliveries
2021
2022 YTD
0%
Vacancy Rate Source: CoStar
Market Snapshot
4.0%
2,679,898
vacancy rate
33,180,242
net absorp Q1
net absorp last 12 mos
46,934,120 under constr sf
Source: CoStar, LPC Research
LEASING ACTIVITY A robust pipeline of new construction has seen leasing activity continue to skyrocket despite the tight vacancy market, with over 13 million square feet worth of deals signed in Q1. This figure is in line with what the Atlanta market has seen over the past two years, with the typical quarterly total of signed leases between 12-17 million square feet. There have been over 62 million square feet of industrial leases signed over the past 12 months. New builds have continued to be a key leasing driver, as currently about 28% of the record 44 million square feet under construction are leased. The Airport/I-85 South Industrial submarket had the most leasing activity in Q1, with 22% all leased space in Atlanta taking place in the submarket. TOP LEASES Q1 2022
Tenant Owens Corning Spreetail
Property
Submarket
Owner/Developer
SF
Lease Type
8095 McLarin Rd
Airport/I-85 South Ind
Clarion Partners
1,044,288
Renewal
200 Metcalf Rd
Airport/I-85 South Ind
TA Realty
909,509
New Lease
4475 S Fulton Pky - Bldg 6
Airport/I-85 South Ind
Blackstone
634,900
New Lease
400 International Pky
Northwest Atlanta Ind
Ashley Capital
498,144
New Lease
ACE Hardware
1220 Palmour Dr
Northeast Atlanta Ind
Strategic RE Partners
474,680
Renewal
Kenco Group
2420 Old Covington Hwy
Snapfinger/I-20 East Ind
Lincoln Property Co.
288,477
New Lease
Allen Distribution Duluth Trading Company
INVESTMENT SALES The Atlanta industrial market saw over $991 million in sales volume in Q1, averaging $99.21 per square foot. This comes on the heels of the largest single-quarter industrial sales volume in the Atlanta market’s history, as Q4 of 2021 saw over $3.3 billion in sales volume. Atlanta has become increasingly attractive to national institutional investors looking for large assets with tenants secured to long-term leases: 80% of the market’s investment volume has come from firms outside of the stats of Georgia. RECENT INVESTMENT SALES
Property
Submarket
Price
SF
139 Orchard Business Pky - Bldg 200
Airport/I-85 South
$135,000,000
1,514,040
200 Metcalf Rd
Airport/I-85 South
$90,905,900
909,509
650 Broadway Ave
Northeast
$59,600,000
613,440
2520 Riverside Pky
Northeast
$55,400,000
367,060
$/SF
Date
Buyer
$89.17
1/13/2022
Florida SBA
$99.95
12/22/2021
TA Realty
$97.16
10/20/2021
J.W. Mitchell Company
$150.93
12/22/2021
BentallGreenOak
lpcsoutheast.com The information contained herein has been obtained from the owner of the property or from a source deemed reliable. While Lincoln Property Company has no reason to doubt its accuracy, we do not guarantee it.
METRO ATLANTA INDUSTRIAL MARKET Q1 2022
MARKET STATISTICS Total Inventory SF
Vacancy Rate Q1 ‘22
Vacancy Rate Q4 ‘21
Net Absorp Q1 ‘22
Net Absorp Last 12 Mos
Deliveries Q1 ‘22
Under Constr
Avg Rent (NNN)
142,453,999
4.9%
3.6%
1,538,241
9,985,299
3,619,515
5,465,00
$4.42
21,587,834
7.8%
6.8%
(237,128)
(261,750)
-
-
$9.62
I-75 SOUTH IND
69,009,858
5.6%
3.1%
(752,455)
4,056,895
1,001,700
4,966,070
$3.84
I-20 WEST/FULTON IND
110,022,170
1.9%
2.0%
308,911
3,501,510
254,100
6,745,672
$5.18
193,006,659
3.1%
3.3%
1,173,640
9,415,074
837,100
18,253,860
$5.30
NORTHWEST ATLANTA IND
82,265,759
5.1%
2.6%
(187,007)
3,568,032
1,904,493
9,067,501
$5.73
NORTH CENTRAL ATLANTA IND
19,260,582
2.6%
4.7%
407,202
684,448
-
656,365
$8.91
SNAPFINGER/I-20 EAST IND
45,486,033
3.6%
4.4%
350,181
1,692,369
-
1,682,952
$5.24
STONE MOUNTAIN IND
23,745,595
2.5%
2.8%
78,313
535,365
-
96,000
$6.01
706,838,489
4.0%
3.3%
2,679,898
33,180,242
7,616,908
46,934,120
$5.14
557,888,603
4.1%
3.2%
2,289,537
31,486,661
7,616,908
43,318,082
$5.17
80,986,235
4.1%
3.8%
(237,533)
(13,426)
-
2,930,000
$4.01
67,963,651
2.3%
3.2%
627,894
1,707,007
-
686,038
$5.33
706,838,489
4.0%
3.3%
2,679,898
33,180,242
7,616,908
46,934,120
$5.14
BY SUBMARKET AIRPORT/I-85 SOUTH IND
CENTRAL ATL/CHATTAHOOCHE IND
NORTHEAST ATLANTA IND
Total Market
BY PROPERTY TYPE WAREHOUSE & DISTRIBUTION
MANUFACTURING
SHALLOW BAY Total Market Source: CoStar, LPC Research
Lincoln Property Company Atlanta tracks industrial buildings that are 25,000 sf or greater.
Need More Market Intel?
Spencer Papciak Research Manager 678.498.7676 spapciak@lpc.com
Turner Fortin Leasing Associate 404.863.9931 tfortin@lpc.com
Lincoln Property Company Southeast 3405 Piedmont Road, Suite 450 Atlanta, GA 30305 404 266 7600
About LPC SE: Lincoln Property Southeast is a commercial real estate firm offering a comprehensive suite of value-added services for our clients. With our substantial local presence and history in the Southeast region, we are ideally situated to provide a superior service, which comes from knowing the goals and challenges faced by our clientele: tenants, investors, lenders and owners of commercial real estate. Our people and our philosophy are the key ingredients for Lincoln’s solid track record of success. The information contained herein has been obtained from the owner of the property or from a source deemed reliable. While Lincoln Property Company has no reason to doubt its accuracy, we do not guarantee it.
lpcsoutheast.com