The Atlanta Commercial Board of REALTORS® (ACBR), the largest commercial REALTOR® association in the country, released its Q2 2017 Industrial Brief on industrial market trend statistics for 22 Atlanta Industrial Sub Markets.
Q2 2017 Industrial Market Statistics
The Atlanta industrial market continues to show strong activity," said F. Keene Miller, 2017 ACBR Board President, and President of Brokerage for Ackerman & Co. Industrial continues to show tremendous strength and depth. Absorption could reach 20 million square feet in 2017. New development is active with 14 million square feet under development. Overall, the market remains very positive for Atlanta.
LABOR: According to the Bureau of Labor Statistics, the unemployment rate decreased 0.3 percentage points from 4.8% in April 2016 to 4.5% in April 2017. The unemployment rate compares favorably to Georgia (5.0%) and higher than the US (4.1%). The Atlanta metropolitan statistical area nonfarm job creation totaled 87,200 in the Atlanta-Sandy Springs-Roswell metropolitan statistical area over the past year. Industrial using jobs (manufacturing and trade, transportation and utilities) added 13,800 jobs during the past year.
ABSORPTION: Absorption averaged 3.5 msf per quarter during 2016 and is on pace to average 5.0 msf per quarter during 2017. Overall absorption totaled 6.6 msf during second quarter and approximately 9.9 msf year-to-date. Major occupiers of space included Variety Wholesale, Duracell, Tory Burch, Mars, Zep Manufacturing Kehe, Kuehne+Nagel, Royal Appliance Manufacturing, Kubota Tractors and XPO Logistics. E-commerce is driving absorption levels, representing more than 50% of the demand.
The South market recorded the most absorption for 2Q 2017 with approximately 4.4 msf absorbed. The West market reflected the second largest absorption total with .8 msf of total absorption during 2Q 2017.
VACANCY: Due to approximately 13.8 msf of space being completed during 2016 and over 5.8 msf through the first six months of 2017, the overall vacancy rate remained flat during the first half of 2017 at 8.8% compared to second quarter 2016. Vacancy rates were down 0.8 percentage points from 4Q 2016.
CONSTRUCTION: With the increase in demand for products due to population growth and increased economic activity in Atlanta, developers continue to build. There are currently 32 buildings totaling approximately 14.0 msf under construction. Through 2Q 2017, twelve buildings totaling 5.8 msf have been completed. Construction activity is expected to remain strong in 2017. Asking rents are expected to increase during 2017 due to tight market conditions, though at a moderate pace in areas with new speculative construction.
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The data in this report was compiled by data provided by Xceligent, a leading provider of verified commercial real estate information. For more information on details of this month's report, please contact the Board at 404.250.0051.