After a record run of tightening vacancies and escalating leasing activity, Atlanta’s industrial market slowed in the first half of 2023. A handful of move-outs and layoffs in the distribution sector have slowed absorption, and a record wave of supply has begun to deliver just as preleasing has begun to soften. Still, the change appears to be more normalization than downturn, and one landlord broker likened it to shifting from fifth to third gear. Despite four straight quarters of rising vacancies, the Atlanta industrial market is still tighter than any time before 2021, with roughly 4.5 percent vacancy.
While vacancies are likely to continue rising through 2023, supply concerns do notappear insurmountable. Even in the unlikely event that all 22 million square feetcurrently unleased and under-construction spaces are delivered tomorrow without a tenant, vacancies would still only rise to 2015 levels. However, the predominance of large-box speculative construction is likely to create significantly higher availabilities in industrial spaces larger than 250,000 square feet.
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