Lidl, Variety Wholesalers Among Users Eyeing 1M SF-Plus Warehouses In ATL
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At a time when some big names are hunting for big industrial space, Ackerman & Co is pulling the trigger on warehouse spec in Braselton.
Ackerman, in a JV with The Yates Group, is breaking ground on a more than 1M SF bulk cross-dock distribution facility off Broadway Avenue in Jackson County. The deal got going after Ackerman purchased a 107-acre parcel from Synovus Bank for $4.5M last week. Now with Transwestern's Julian Brown and Ackerman's Brett Buckner, the firm will be fielding more than 4M SF of deals floating around the Atlanta market.
Ackerman president Kris Miller says buildings nearing or greater than 1M SF remain the most dynamic segment of the Atlanta industrial market.
Kris says seven new leases have been signed in the last 14 months in these larger buildings. And there is no uncommitted 1M SF inventory remaining in all of Atlanta. Braselton Logistics Center will be one of a few, if not the only, to deliver in the next 12 months, he says. The site, a mile-and-a-half from I-85, is located near other big industrial warehouses for Mizuno, Hitachi, Whole Foods Markets, Havertys and Carter's.
There was a time in Atlanta that a 1M SF spec development was a gamble—and not a very good one. But that was then and this is now. Atlanta's industrial market absorbed more than 15M SF last year, the third-most of any market in the US.
That pushed vacancies to 8% metro-wide, the lowest its been since 2001, and rents up above the $4/PSF mark—the first time ever seen in Metro Atlanta, according to info from Colliers International. Google Fiber's mammoth Fairburn deal, Smuckers headed to Shugart Logistics Center and Exel Logistics taking the 1M SF former Shannon Mall redevelopment (here) are among the biggest highlights of 2015.
And there are still big deals to be had: William Sonoma is in final talks with Hillwood Investment Properties to lease 1M SF (via Exel Logistics) at Braselton Commerce Center. Variety Wholesalers--operators of such bargain stores as Roses, Maxway and Super Dollar--is eyeing both Georgia and Alabama for a 1M SF industrial deal. German discount grocery Lidl—a competitor to Aldi—is in the market for a 1M SF requirement to support its planned store rollout here. And cosmetics firm Sephora is in the hunt for 600k SF, according to numerous sources.
Another player in the spec field is a new addition to the Atlanta market—with well-known faces. Core5 Industrial Partners launched late last year with former IDI executives Tim Gunter, Lisa Ward, Linda Booker, Jennifer Jones and David Nelson (not pictured). With backing from former IDI Gazeley owners Kajima Corp, they've begun the firm with a bang: Breaking ground on a 874k SF spec cross-dock facility at the Shugart Farms industrial parcel off I-85 south of the city. Core5 tapped Cushman & Wakefield's Pat Murphy, Ray Stache and James Phillpott to lease it. The new team has been working on its debut deal for a few months, entering the market at a good time, Tim says.
But Tim's optimism is tempered not only by the more than 12M SF of industrial space under construction in Atlanta (according to Cushman & Wakefield data), but also recent violent swings in Wall Street and a major slowdown in shipping from China.
“We're also being a little cautious because this is a cyclical business, and this recovery's been going on for awhile,” Tim says. Certainly, there's no immediate signs of a pullback in demand, especially since a lot of companies have been rejiggering their industrial platforms in light of e-commerce. And so far what's been built has been filled and filled quickly, he says, so the question in a lot of people's minds is how long the cycle will last.