SOUTHEAST SNAPSHOT, JULY 2009
Atlanta Industrial Market
Bill Doran, vice president of Atlanta-based Carter, predicts that the rejuvenation of the Atlanta industrial sector will mirror the revival of the national economy. The bad news, he says, is the recession most likely won’t end any time soon, so industrial brokers, developers and tenants are in for some waiting. “Typically, the real estate market will trail the economy,” Doran says. “Most of the reports predict that market growth will occur in 2011 or 2012.”
According to Doran, the vacancy rate for the sluggish Atlanta industrial sector has grown 0.4 percent in the first quarter of this year, prompting landlords to move into concession mode to keep the tenants they have. Doran says that landlords are having an extremely hard time finding new tenants for vacated spaces. The good thing is that as the vacancy rate rose, development nearly stopped.
“There is virtually no development going on currently,” Doran says. “Developers are faced with poor market fundamentals and a lending environment that would make it very difficult, if not impossible, to get a speculative development financed.”
A few new developments are still popping up, however. Last month, General Mills announced plans to build a 1.5 million-square-foot facility in Social Circle, Georgia — 46 miles east of Atlanta — and the grocer Aldi will build a distribution center in nearby Jefferson, Georgia. The Pennsylvania-based sheet music distributor J.W. Pepper has also just moved into the 75,680-square-foot warehouse it purchased from IDI in April. The Lithia Springs, Georgia, space will be used as the company’s East Coast distribution center.
This small level of activity is proof that the market is still alive and will someday return to its once healthy state, Doran says. “During the last part of 2008 and the first part of 2009, companies faced uncertainty at every level — political, financial markets, economy — that made making commitments very difficult,” he says. “During the next year, as some of the uncertainty clears up, the market should stabilize as businesses regain some level of confidence in making decisions regarding their future. It should mean an increase in the level of transactions occurring.”
— Jon Ross
©2009 France Publications, Inc. Duplication
or reproduction of this article not permitted without authorization
from France Publications, Inc. For information on reprints
of this article contact Barbara
Sherer at (630) 554-6054.
|