In several categories, Atlanta has been ranked as one of the top big-box industrial and warehouse markets in North America, according to a new report from CBRE. 

Transactions for big-box warehouses – those of 200,000 sq. ft. or larger – hit new highs in 2021, as retailers added safety stock to limit supply chain disruptions and continued to meet online shopping demand. This category recorded 450 million sq. ft. of transactions in the top 23 North American markets last year, up significantly from 350 million sq. ft. in 2020. The study includes markets with more than 75 million square feet of big-box product.

Atlanta placed in the top 10 of four big-box categories, including total industrial inventory, growth percentage, industrial space under construction and 2021 leasing volume. Georgia’s capital and largest city ranked highest in industrial space under construction as of the end of 2021 and total growth rate, placing third in both categories. As of the end of last year, Atlanta had 30.8 million sq. ft. of big-box industrial space under construction, falling only behind Dallas-Fort Worth and Southern New Jersey/Eastern Pennsylvania. Of this space, 22.3 percent has been preleased.

Atlanta also ranked among the top big-box growth markets in the country at 7.5 percent, falling just shy of Houston and Phoenix. The report calculates growth percentage as overall net absorption divided by existing inventory. Atlanta was also ranked as a top market for 2021 big-box leasing activity (30.8 million sq. ft.) and existing big-box inventory 334.3 million sq. ft.

“As the gateway to the Southeast, Atlanta’s logistical infrastructure provides many users the unique opportunity to reach customers easily and at affordable rates compared with other major Tier 1 markets. Atlanta’s quality and depth of labor, along with its pro-business climate, creates a very compelling value proposition for distributors,” said Tony Kepano, Vice Chairman with CBRE.

*Growth rate is overall net absorption divided by existing inventory 

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Chicago led all markets with 59.4 million sq. ft. in transactions, followed by Inland Empire (49.2) and Southern New Jersey – Eastern Pennsylvania (48.7). 

General retailers and wholesalers led the way in transactions at 35.8 percent, followed by third-party logistics (32.2 percent) and last year’s leader, e-commerce-only users (10.7 percent). National vacancy rates in this category fell to a record-low 3.4 percent, down from 4.6 percent in 2020.

Construction completions were down slightly in 2021 at 186.7 million sq. ft., compared to 194.4 million sq. ft. the year prior. Some relief may be found in the construction pipeline, which is at a record 323.9 million sq. ft. 

“Consistent construction completions will be essential for sustained transaction activity in 2022,” said James Breeze, Global Head of Industrial & Logistics Research for CBRE. “The demand is there, but supply is extremely tight. If projects are delayed due to lack of materials or slow delivery from supply chain challenges, occupiers will find it difficult to make big moves.” 

To download the report, click here.