Spring 2020 Atlanta Industrial Market Report
Atlanta’s industrial market remained on solid footing in Q1 of 2020, but an increase in delivered speculative supply coupled with a recent slowdown in absorption showed a rise in overall vacancy. Net absorption in Q1 was essentially flat, representing one of the lowest SF quarters for demand over the past decade. However, leasing activity ended strong at the end of Q1 at 10,033,208 SF of newly signed leases. In the first quarter, seven new industrial buildings (100,000 SF plus) totaling 2M SF broke ground in the Atlanta market, five of which were located in the Northwest submarket.
While the impact of COVID-19 in correlation with commercial real estate remains unknown, the outbreak is expected to cause some economic disruption in Atlanta. There has been a direct parallel with the Port of Savannah’s TEU import volume and South Atlanta absorption, so a slowdown in East Coast port traffic could affect Atlanta’s industrial market over the next two quarters. However, the industrial sector may fare better than other property types due to a rise in demand for goods and logistical capabilities. E-commerce is expanding more quickly and acquiring new customers out of necessity. While times of uncertainty are looming over the commercial real estate industry, industrial is likely to continue to be the leading sector in real estate.