The Atlanta Commercial Board of REALTORS, the largest commercial REALTOR association in the country, released its Q2 2016 Industrial Brief on industrial market trend statistics for 22 Atlanta Industrial Sub Markets. Industrial Brief, is compiled by data from Xceligent, a leading provider of verified commercial real estate information.    

LABOR: According to the Bureau of Labor Statistics, the unemployment rate dropped 1.2 percentage points from 5.8% in May 2015 to 4.6% in May 2016.  The Atlanta metropolitan statistical area job creation totaled 76,600 in the Atlanta-Sandy Springs-Roswell metropolitan statistical area over the past year.  Industrial using jobs (industries include manufacturing and trade transportation and utilities) increased 23,800 from May 2015 to May 2016. 

ABSORPTION: The Atlanta metro absorbed over 5.8 million square feet during the second quarter of 2016 and 9.8 msf year-to-date.  Major occupiers of space included William Sonoma, Exel, Shaw Industries, Beauflor USA Inc, Delta Airlines, Federal Express, Maurice Sporting Goods and Woodgrain Companies.

VACANCY: Due to continued positive absorption, the overall vacancy rate has fallen from 8.8 % in Q1 2016 to 8.5% at the close of second quarter 2016. Industrial vacancy rates dropped from 8.9% in Q2 2015.

CONSTRUCTION: The South market recorded the most absorption for second quarter with 1.7 msf absorbed. The Northeast market reflected the second largest absorption total with 1.6 msf of total absorption during second quarter 2016.

TOP LEASE TRANSACTIONS: Developers continue to build as demand for industrial product strengthens. There are currently 23 buildings totaling approximately 8.1 msf under construction.  Through second quarter 2016, twenty buildings totaling 8.5 msf have been completed.

A Word from ACBR Member, Sim Doughtie: “The Atlanta industrial market continues to have strong and consistent activity and absorption (17 quarters in a row of positive net absorption), which has led to a lower vacancy rate, and an increase in new construction. Demand for distribution and e-commerce space, and a lack of supply of those buildings has driven the uptick in new construction. The compressed capitalization rates (which means higher sales prices for developers) has also contributed to fuel new construction as developers build spec buildings, lease them as fast as they can, so they can take advantage of the current red-hot investment market”