Atlanta's rapidly growing economy makes it an attractive location for virtually any sized business from any industry. As such, TenantBase has prepared this guideline to help choose the best industrial and warehouse office space in the city, segmented by location and basic metrics to help you select the most appropriate space for you and your organization's specific needs, goals, and expectations.
Atlanta’s Staggering Statistics
With over 5 million sq ft of warehouse space under construction in Q1 2018 alone, to go along with the 16.7 million sq ft built in 2017, it's evident why the area has seen the highest rent growth in industrial real estate since 2001. Spread out over ten submarkets and nearly 600 million sq ft of either warehouse, industrial, or flex space – the vast majority being industrial – Atlanta is an economic powerhouse that doesn't appear to be slowing down anytime soon.
Coupled with solid employment growth from an upward trend in manufacturing and an overall market vacancy rate just a bit above 8% – a figure expected to drop even further in the near future – the region's rapid growth can make it difficult to find space. As a result, many organizations are having to expand into areas outside of Atlanta proper to simply have more space to choose from. However, despite the significant construction efforts to expand available industrial space, demand is still outstripping supply, resulting in overall warehouse rents at $4.83/sq ft and trending upwards.
Space closer to downtown skews to the older side of available buildings with an increasing amount of flex space. As a result, the natural adaptive nature of the reuse/flex space is proving to be popular with organizations needing space that can mold around their specific needs, resulting in far higher rents than other types of available space. This, of course, can put organizations in a bind since the expansion of flex space in the downtown area creates greater availability than in other areas of Atlanta but also comes at a steeper price. In this regard, TenantBase can help you navigate these complex waters to help you find solutions that fit your needs.
Building on the momentum felt throughout the downtown area and subsequent increase in flex space availability, e-commerce companies continue to flock to the repurposed space, a key component to the escalating price points. In fact, e-commerce expansion is driving a significant portion of the new development throughout the area, giving developers newfound confidence to build on a speculative basis that simply didn't exist in previous cycles.
Emblematic of Atlanta's dynamic local economy, Q1 2018 alone saw three massive deals close within the market – a 750k sq ft lease in the I-75 South submarket, a 745k sq ft lease in the I-20 West/Fulton Industrial Market, and a 585k sq ft lease in the I-85 North Corridor. Collectively, these recent deals – along with a new UPS facility currently under construction in the Fulton Industrial Area – are a testament to Atlanta's status as an industrial hub that stands head and shoulders above most – if not all – of the rest of the country.
Choose the Area Best For Your Needs, Goals, and Budget
Given the city's importance to the nation's economy and any organization trying to capture some of its economic magic, choosing the most appropriate location from the following choices is crucial in maximizing the benefits derived from doing business within Atlanta's booming commerce.
I-75 North Corridor
As demonstrated by its low 6.1% vacancy rate and higher quoted rents between $6.50 - $11.00 per sq ft – both figures outliers to market averages – Atlanta’s I-75 North Corridor is amongst the most popular areas within the region. With 48 million sq ft of functionally diverse space that includes flex, industrial, warehouse, and distribution with various ceiling heights and other specific characteristics, the I-75 North Corridor offers a variety of choices in space, particularly around Marietta & Kennesaw. Locations further from the hub’s center tend to have newer available space with even greater flexibility in function and size.
Georgia 400 Corridor
The Georgia 400 Corridor is the smallest of Atlanta's submarkets but also amongst the newest. With the highest rents of all of the city’s industrial areas at approximately $8.50 per sq ft, the Georgia 400 Corridor skews towards newer midsize spaces in the 150k sq ft range as well as large distribution centers. Although, as said, it is small in comparison to other submarkets with only 21 million sq ft of space, the area has grown from virtually nothing just 15 years ago.
I-85 North Corridor
At 175 million sq ft, the I-85 North Corridor is the largest of Atlanta's submarkets and features rents generally in line with overall market averages at approximately $5 per sq ft. The I-85 North Corridor features a wide range of types of space that tend to get bigger and newer as you extend from market center. The area has also seen a great deal of recent activity towards the northern end of the submarket, particularly with big-box warehouses.
I-20 Fulton Industrial Market
Of Atlanta's ten primary submarkets, the I-20 Fulton Industrial Market is its oldest and most established industrial area, featuring 84 million sq ft of mostly midsized building space. It boasts a wide variety of space functionality but leans towards warehouse and distribution space given its proximity to the I-20. Over 3 million sq ft of new space is currently under construction with the new UPS facility accounting for nearly half of that figure. Rents in the I-20 Fulton Industrial Market are near local median rates in the high $4 per sq ft range.
One of only two of Atlanta's submarkets that have displayed negative absorption in recent years, the Chattahoochee/CBD area has taken much of that excess supply and converted it to adaptive reuse loft office/retail, either reclassifying or scrapping over 300 buildings. What remains is 30 million sq ft of primarily residential or highly successful properties that are very close to town and contains the majority of Atlanta's flex space. Rents are comparatively expensive at $6.50+ per sq ft, but its proximity to town and variety of adaptive reuse properties make Chattahoochee/CBD a unique submarket in the region.
The Stone Mountain submarket is amongst the older, more established industrial markets in Atlanta. With 24 million sq ft of space primarily comprised of mid-to smaller sized properties, supply in Stone Mountain won't be drastically expanding in the near future as there is not much new construction currently underway. Rumors persist about a large industrial development for an unnamed user. So that may change soon. Rents in the area tend to float just below the market average, currently in the low to mid $4 per sq ft range.
Along with the Chattahoochee/CBD area, the I-20 East is the only other submarket to experience negative absorption in recent years due to loss of inventory, most of which was either repurposed or demolished for residential properties. With 38 million sq ft of space that currently hovers in the low $4 per sq ft range, the I-20 East submarket this one of the older and more established areas in Atlanta, featuring mostly mid to smaller-sized buildings and a slight amount of flex space.
Airport, I-85 South, and I-75 South
These last three Atlanta submarkets are all in the southern portion of the city and close to the airport. Offering 172 million sq ft of primarily Class B and C space, vacancy rates are the highest in the city at just over 10%, bringing rents down to the lowest of Atlanta's submarkets at approximately $3.50 per sq ft. The lack of available land means there is no new construction in any of the three areas and what exists tends to be older with small warehouse, distribution, and flex space properties most common.
As Atlanta's economy continues to display robust growth and strength in coming years, organizations should continue to anticipate strong absorption throughout the majority of its submarkets. Although those elevated absorption rates will undoubtedly drive rents upward, it will also spur new construction to provide additional supply for the local economy. Of course, TenantBase will be there for your industrial and warehouse needs along the way.