Q2 2021 Atlanta Industrial Market Report
The Second Quarter Atlanta Industrial market continues to sizzle. Overall absorption reached almost 9 MSF, which is one of the strongest quarters ever. At the same time, the vacancy rate has dropped under 5% for the first time in over 30 years. Rental rates continue to increase with high demand and limited supply coming to market. Demand for E-Commerce warehouse space and the need to keep extra supplies on hand are causing users to reevaluate their space needs due to supply chain disruptions. Many tenants are choosing to expand and takedown additional space.
Nationally, Atlanta is the best performing market in absorption, rental rate increases, and falling vacancy rates.
South Atlanta leads the way with over 1.6 MSF of absorption after having almost 7.5 MSF of absorption in Q1. While I-20 West/Fulton Industrial vacancy rate dropped 70 basis points just from Q1 to Q2, now standing at 2.3% vacant. North Central has the highest rental rates, averaging just over $9. On average, asking rental rates were up 1.4% (annualized 5.6%), while warehouse space rates were up 2.9% (annualized 11.6%). As rates head to new heights, it is unclear how much higher they will go. Construction is still robust, but recent developments are taking longer to complete due to supply constraints.
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