The Comeback: Industrial
We're 10M SF away from seeing real industrial spec development in Atlanta. (And 20M away from us selling our house to live in an refrigerated warehouse, just to be in a cool, new property.)
That first number is the estimate of Seefried Properties' Greg Herren during this morning's 4th Annual Bisnow Atlanta Industrial Summit at the Ritz-Carlton in Buckhead. Greg told the audience of more than 250 that Atlanta tallies nearly a 12% vacancy. Traditionally, spec gets going when Atlanta hits 10% to 10.5%. Consider the fact that Atlanta has ranked No. 3 of the top national industrial markets with absorption, and "on our current pace of leasing, we need another 10M SF of absorption, and then we should be in position" for spec development.
Our first panel: First Industrial's Corey Richardson, Prologis' Kent Mason, JLL's Rodney Davidson, IDI's Lisa Ward, and Gwinnett CID's Chuck Warbington (who moderated). All say activity has picked up tremendously in Atlanta. But the submarkets that benefit are uneven. Lisa says the activity in the northeast corridor is the best, where IDI is tallying an 8% vacancy. And she confirmed that IDI will develop an 800k SF build-to-suit for "Project Carrier" in Jackson County (we reported this deal here and ID'd the tenant as TJX Corp).
Kent says even previous industrial "dead zones" are showing activity, such as I-20 West, Fulton Industrial, and Savannah. (Is anybody else concerned, or have we just been watching too muchThe Walking Dead.) Corey (above) says we're still slow on the small tenant sphere—those who use anywhere from 20k to 50k SF. That's because those tend to be mom and pop companies, and are often tied into the housing industry, which is still slowly coming back from the depths of the recession. "We believe the economy is coming [back], but we're tied to the housing industry to an extent."
With Prologis just completing a 1.1M SF build-to-suit for The Home Depot at Prologis Park I-75, Kent tells our audience that there are quite a few big box deals floating in the market that could be a "needle mover" on occupancy here. Without naming names (as much as we tried), Kent says he's seeing a dozen build-to-suit deals in metro Atlanta encompassing more than 1M SF of space each.
During our breakfast schmooze, we chatted up JLL's Chris Tomasulo, who tells us he just helped ink a deal for Menlo for nearly 400k SF at IDI's Westfork project in Lithia Springs. Here, Chris (second from right), is hanging out with Burke Holdings' Bill Hare, Bock & Clark Corp's Peggy Henderson, and Everclear Enterprises' Jody Saka (celebrating a birthday this week).