Atlanta’s industrial sector and its historically strong performance have fortified the city as a strategic Southeast location and gateway market nationwide. Activity, which has decreased since peak demand during the COVID-19 pandemic, is now returning to normalized levels. The net new requirement pipeline remains robust primarily due to the influx of manufacturing, advanced manufacturing, life sciences, automotive, alternative energy and data center projects. How owners and tenants invest in industrial properties has also shifted. Owners are seeking properties with short weighted average lease terms and investments below replacement cost. Meanwhile, occupiers are making moves to crisis-proof their networks with onshoring and nearshoring of production that was previously conducted overseas, and they’re adjusting their overall supply chain and logistics strategies to diversify and avoid dependence on one region or vendor. Players in the market remain cautiously optimistic, which has subdued demand, but that is expected to be short-lived once macro-economic conditions stabilize. High inflation and rising interest rates over the past 12 to 18 months have significantly contributed to decreased demand in Atlanta. However, with continued population growth and Atlanta’s central location in the Southeast, the metro area’s compressed demand will be short-lived. With that said, Atlanta’s industrial market remains strong …
