August 2025 | Market Brief
EXECUTIVE SUMMARY
At the start of 2025, Lee & Associates made several key predictions about the Atlanta industrial market. With mid-year behind us, we are checking in—benchmarking where predictions prevailed, where the market surprised us, and what’s shaping the outlook for the remainder of the year.
Despite headwinds, leasing has remained resilient, supply growth has eased, and tenants are staying put. However, vacancy is gradually rising as tenants adapt to a new market cycle.
YEAR-END 2025 OUTLOOK
What to Expect Next:
- Supply growth will slow further, with ~3M SF projected to deliver in H2; new groundbreakings remain limited.
- Leasing momentum increases, led by renewals, though new leasing is already gaining traction in Q3.
- Sublease availability plateaus after higher than expected levels in H1 2025.
- Vacancy nears 9.0% by YE 2025, led by greater move-in activity and slowing supply additions.
- Anticipated Fed rate cuts in Q3/Q4 could unlock capital, boosting confidence & driving a moderate rebound in industrial sales activity by YE.
FINAL THOUGHTS
Year to date 2025, Atlanta’s industrial market is proving more resilient than reactive. An unexpected number (and size) of subleases entered the market in the second quarter, and overall vacancy rose moderately. But recent prospecting activity and transaction levels predict a rosier end to the year. Combined with limited new supply, fundamentals should tighten by year-end, though by how much remains to be seen.