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Developers Expect Industrial To Remain Hot For Foreseeable Future

Pattillo Industrial Real Estate CEO Larry Callahan spoke on Amazon HQ2's potential impact on Atlanta.

One of Atlanta's prolific industrial developers expects the good times to keep on trucking.

Pattillo Industrial Real Estate CEO Larry Callahan said Atlanta's booming industrial market shows no signs of stalling, especially as industrial tenants continue to expand logistics networks into modern warehouses where ceiling heights are higher up than in older distribution centers.

“Recessions don't actually happen because of the passage of time,” Callahan said. “We have years to go. The fundamentals of this market are as good as I've seen in my career, and we're not seeing it coming to an end even though it's been going on for some time.”

Callahan's optimism was shared by other panelists at Bisnow's Atlanta Industrial event Sept. 19. Among the companies looking to expand in Atlanta include food processors, e-commerce retailers and third-party logistics providers.

“We're on our 12th Amazon right now,” CRG Real Estate Vice President Mike Demperio said. "And we don't see it slowing down."

The impact that Amazon is having not only on the retail industry, but how people shop will have reverberations on Atlanta's real estate market.

“It's instant everything. I ordered a part the other day at 8 o'clock in the morning and I had it at my house by 10,” Demperio said. “We haven't begun the game yet, really.”

Those sentiments have been echoed in recent weeks, with one research firm naming Atlanta the hottest industrial market in the country after nearly 13M SF of warehouse space was leased up by tenants by the middle of 2017, including Zodiac Services America, which recently renewed and expanded at Birmingham, Alabama-based GCP's Air Commerce facility in College Park for 145K SF.

“Our supply is not outpacing that demand,” Robinson Weeks Partners President David Welch said.