The Avison Young Q3 2024 Atlanta Industrial Market Report reveals notable trends in the Atlanta industrial real estate sector:
- Increased Leasing Activity: Leasing activity surged by 17.5% year-over-year, reaching 9.4 million square feet—the highest level since 2022. Q3 2024 witnessed more square footage leased than any quarter since Q4 2022.
- Rise in Absorption: The heightened leasing activity led to an 80% increase in absorption compared to the previous quarter, indicating stronger demand for industrial space.
- Decline in New Construction: Groundbreakings for new construction projects have significantly decreased, down over 80% from the peak in 2021. In 2024, only 27 buildings totaling 7.7 million square feet began construction, compared to 125 buildings totaling 40.3 million square feet in 2021.
- Rising Vacancy Rates: With vacancy rates continuing to climb, the reduction in new developments is expected to help balance supply and demand, potentially improving the market’s overall health.
- Smaller Lease Dominance: Leases under 50,000 square feet accounted for 54% of all deals signed during Q3 2024, highlighting a trend toward smaller industrial space requirements.
Summary: The Atlanta industrial market is experiencing a rebound in leasing activity and absorption rates, while new construction has slowed considerably. This shift suggests a market correction aimed at addressing rising vacancy rates, with a notable emphasis on smaller lease transactions.