Construction Activity Hits All-Time High in the Region
It’s no secret that the Atlanta industrial market has become a hotspot for new development in recent years, but the region has taken its construction pipeline to another level in recent months. Atlanta now ranks second nationally for the most industrial space underway, behind only the Dallas-Fort Worth metroplex.
Atlanta boasts almost 25 million square feet of industrial space under construction, the highest figure in the market’s history. And with groundbreakings humming along, the region may continue to see construction activity accelerate in the coming quarters.
While concerns of overbuilding are warranted, recent
leasing velocity has helped ensure that supply-side pressure on the market will likely be minimal. Moreover, fast-growing companies and multinational firms continue moving into new facilities across the region.
Looking at the neighborhoods across metropolitan Atlanta that industrial tenants are moving into by year shows that the Airport/North Clayton, near the Interstate 85 and Interstate 285 interchange, has undoubtedly received the bulk of activity in recent years. Firms have also zeroed in on Interstate 20 West and South Clayton/Henry County.
The south side of the region will likely continue to see an increased amount of new construction and major move-ins are expected to continue there. Areas south of Interstate 20 generally are able to better accommodate industrial land uses, where zoning caters to large distribution and warehousing facilities. The south side also is relatively close to the Port of Savannah, has an ample workforce from Atlanta's suburbs, and contains less clogged roads compared to the north side.
A little over half of the industrial and flex space underway in the Atlanta market is already preleased, thanks in large part to the strong demand even throughout the ongoing coronavirus pandemic. This is compared to the similarly sized super-regional industrial hubs of Dallas-Fort Worth and Southern California's Inland Empire, which only have around 30% of their under-construction inventory preleased.
With structural advantages, including the busiest airport in the world, access to the growing Port of Savannah, strong transportation infrastructure and a deep workforce, the Atlanta area will likely continue to attract companies looking to set up or expand distribution operations in the Southeast.