Atlanta Distribution Magnate Moving Into Industrial Real Estate In Affluent Neighborhoods
A locally based distributor of weighing scales and novelty store items is dipping its hands into the very space it depends on for its business: last-mile distribution.
Sahni Enterprises is planning to break ground on a 230K SF e-commerce-focused distribution center in Cumming, just off Georgia 400 at the intersection of Settingdown and Martin roads, nearly 50 miles north of Downtown Atlanta. Sahni plans to break ground on the $23M project in October after achieving construction financing from Ameris Bank, said Gary Sahni, the founder of Sahni Enterprises.
Sahni said his company, which manufactures and distributes digital scales and hookahs, plans to occupy up to 80K SF of the facility for its own operations. But with ceiling heights of 40 feet, Sahni is looking to attract e-commerce companies like Amazon that have been voracious in their appetite for last-mile distribution hubs, especially in affluent communities.
“The traffic is going so bad, more and more people are moving toward Forsyth County,” Sahni said.
Forsyth County ranked as Georgia's most affluent county last year, with a median household income of $112,100 a year, nearly twice the median household income for the state as a whole, according to 2019 data by the U.S. Census Bureau. The county is home to more than 87,500 homes, nearly 85% of which are owner-occupied, according to the census data.
Industrial landlords in the North Central Industrial submarket, which runs along the Georgia 400 spine through Alpharetta and Cumming, saw absorption reach 155K SF during the second quarter, according to JLL. While one of the slowest industrial submarkets in terms of absorption, it's also one of the smallest, with 13.2M SF in total product.
Transwestern Vice President Keith Pierce said projects in this submarket typically range in the smaller size like Sahni's development, given they tend to be leased to smaller, local businesses.
“This development speaks to the accelerating demand for last-mile delivery, as well as the growth of North Fulton, Forsyth, and northern Georgia as affluent population centers,” Pierce said in an email to Bisnow.
But 40-foot ceiling height last-mile distribution centers are part of “the new wave of e-commerce centers” that are sprouting in Metro Atlanta, with developers striving to bring them closer to major population centers, King Industrial Realty President Sim Doughtie said in an email to Bisnow.
“It gets the products closer to the customer for quicker delivery, and it also cuts down on transportation costs due to the shorter delivery routes,” Doughtie said.
While this isn't Sahni's first foray into commercial real estate — the firm got into commercial real estate investing a decade ago with retail, hotel and residential — this is the start of its industrial move.
“I think I'm enjoying this so much more than my primary business,” Sahni said. “I'm still a rookie at this. But I'm enjoying this.”
Sahni also owns a 25-acre site in Alpharetta at the corner of McGuiness Ferry and McFarland roads that is approved for a 160K SF distribution hub near the Halcyon mixed-use project. Sahni said unlike in Cumming where he is starting the project without any leases in tow, the Alpharetta one is being marketed as a build-to-suit.
“I really feel in Alpharetta for the right candidate doing build-to-suits is a home run for them just because you're in the heart of Forsyth [County] and [the city of] Alpharetta with no fulfillment. Hello?!” Sahni said.