For one industrial real estate honcho, Atlanta is close to being overbuilt with warehouses. Or maybe not.

DCT Industrial's Jay Mitchell (on left with First Industrial's Corey Richardson) says while we're in the good times, “the reality is, yes, we're getting to be overbuilt.” Jay's comment came during our 2016 Atlanta Industrial Update event this morning, and on the heels of our recent report that highlighted a deluge of spec industrial space underway in metro Atlanta. And while Jay's initial comment raised eyebrows, he was quick to backtrack on when that overbuilding point will be reached, noting that much of the space built on spec last year has been leased. “In general, that looks like a positive trend,” he says, adding of a projected 6M SF delivering this year, all but 900k SF should be leased. “We don't see a cliff coming this time.”

Jay and Corey were among a panel of industrial investors and developers that included Robinson Weeks Partners' David Welch, Marcus & Millichap's Bob Johnson (who moderated), Core5 Industrial Partners' Lisa Ward and Seefried Properties Ferdinand Seefried.

The biggest change this cycle has been the impact of e-commerce on industrial real estate, where 40% of US absorption has been from online retailers or brick-and-mortar retailers enhancing their online sales, Ferdinand says. Typical requirements for e-commerce are huge. For instance, Ferdinand points to Amazon (with which they developed more than a dozen facilities), which needs an average of 850k SF on 100 acres that can accommodate 2,000 or more parking spaces as well as 400 trailer parking spots. And the multi-story warehouse is “highly automated,” he adds.

Lisa calls e-commerce the “new shift” in industrial real estate, noting its growth despite lackluster US GDP growth. “These companies are just in their infancy. From that perspective, we can see this continuing for quite a long time,” she says. And David says the next phase of e-commerce growth will be smaller infill warehousing facilities that will allow retailers to fulfill orders in a day or even by hours.

The impact of e-commerce on industrial even had Panattoni Development's Dayne Pryor (here) calling warehousing “the new retailing” as online retailer use of these facilities grows. “That's the force to be reckoned with.” Dayne was part of a second panel that calso touched on e-comm's impact, including Prologis' Jason Bennett, Trammell Crow's Mark Dishaw, FCL Builders' Corey Singer (who moderated) and Pattillo Industrial Real Estate's Larry Callahan.

Larry says there's not been many 150k to 300k SF warehouses built this cycle, especially closer to population centers. “And I think we're reaching the point where that will start happening,” Larry says, as retailers push toward same-day delivery. Mark even notes that one unidentified e-commerce requirement is eyeing Atlanta and one other state. One of the factors: How fast can the area FedEx facility deliver packages? Mark says Atlanta has the edge in that regard, but declined to identify the prospect.