1st Quarter 2018 Industrial Report

The metro Atlanta industrial market continues to trend positive. As for 2017, the market set new highs in values, transaction volume and rents and a low in vacancy rate. Overall, this is one of the stronger market segments in Metro Atlanta with most market participants projecting positive growth throughout 2018. Below is a quick summary of the Year End 2017 Metro Atlanta Industrial Market stats as compiled by Crossroads Appraisal Group from information obtained from CoStar.

If you would like a PDF version of the information below, it is available here for your convenience

SUPPLY

 

A total of 16,656 industrial buildings were identified in metro Atlanta housing about 742.5 million square feet.  As displayed to the right, the supply of industrial space has been increasing each year since 2012.

VACANCY TRENDS

After several sluggish post recession years, Atlanta’s industrial market began to improve in 2012.  As shown to the left, vacancy rates generally trended down from 2012 to 2017. The first quarter 2018 recorded a slight increase which appears to be a result of new deliveries in the market.

ABSORPTION, DELIVERIES & UNDER CONSTRUCTION

After five plus years of virtually no new product after the 2008 crash, new construction began again in 2014 with a spike in deliveries in 2016. There continues to be a robust pipeline of new product. However, a majority of the new construction is large buildings as the supply of smaller owner user properties continues to tighten.

TRANSACTION VOLUME

Sales activity in the market has generally trended up since 2012 with 2017 recording the six year.

VALUATION HISTORY

Values have trended up since 2012 while cap rates were compressing through 2015.  Since, cap rates have been moving up modestly most likely as a result of the Fed’s interest rate hikes.

RENT TRENDS

As displayed below, rent growth has continued to be positive since 2012.

CONCLUSION

The metro Atlanta industrial market continues to trend positive. As for 2017, the market set new highs in values, transaction volume and rents and a low in vacancy rate. Another good sign was the fact that absorption outpaced new construction, a trend reversal from 2016. On the negative side, cap rates are creeping up and construction levels are at post recession highs. Overall, this is one of the stronger market segments in Metro Atlanta with most market participants projecting positive growth throughout 2018.

Has there ever been a time when you wish you had access to a commercial appraiser?  Perhaps a time when a deal was falling apart because of what you considered a bad appraisal and you were not sure what to do next.  We have a solution, we would like to invite you to join our Facebook group “Atlanta Commercial Appraisers For Investors & Brokers” where you will have access to several of Atlanta’s top commercial appraisers who are ready and willing to answer appraisal and or other market related questions.  In the group, we will be sharing quarterly market reports similar to the one above, keeping you up to date on the changes in the appraisal industry that directly impacts you and providing guidance and advice on items such as how to challenge a bad appraisal.  This is an open forum for you to get your questions answered and facilitate your ability to close deals.  (Click here to join our group)

Looking forward to interacting with you in the Group!

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