MARKET BRIEF: ATLANTA INDUSTRIAL DEVELOPERS AREN’T OVERBUILDING – 3 REASONS WHY
As 2022 winds down, industrial demand in Atlanta remains at unprecedented levels. In just the last 30 months alone more than 70 million SF of space has been absorbed. Developers are busy. Keeping track of new construction activity, sustained at well over 100 buildings, is almost as challenging as forecasting how quickly the next high rent watermark will occur. But with new construction levels sustained at or above 30 million SF for the last 18 months, is Atlanta at risk of overbuilding? Data from Lee & Associates suggests more construction is needed to support demand.
While it’s anticipated the Federal Reserve’s rate hikes will slow overall demand throughout the economy over time, more regionally-relevant factors such as in-migration, job opportunities, quality of life and the Port of Savannah will counter some of the headwinds from macroeconomic factors. Additionally, e-commerce as a share of overall retail sales is expected to increase 1% per year for the next several years, providing positive momentum for expanding industrial markets like Atlanta’s.