While the U.S. industrial market is expected to slow this year due to fears of an impending recession, demand remains strong — especially in one of the nation's largest industrial markets: Atlanta.

The Atlanta industrial market headed into 2023 with nearly 43M SF of construction, ending 2022 with more than 11M SF already pre-leased. Despite experiencing a slight uptick in vacancy rates, the Atlanta industrial market appears to be primed for another successful year.

However, despite market challenges like economic volatility and long lead times, Catamount Constructors and its clients are working toward completing projects and forging more deals.

Catamount Constructors is a 100% employee-owned, ENR Top 400 national contractor with over 500 industrial projects completed valued at $4B across 36 states. With more than 25 years of industrial experience in the Atlanta and larger Southeast market, Catamount has a proven track record with creative problem solving for clients through challenging economic conditions.

Bisnow spoke with Vice President and Operations Manager Mitch Brown and Business Development Manager John Curry about trends the firm is noticing in the market, projects the team is working on and where they see the market headed in 2023.

Brown will be speaking at Bisnow’s Industrial Southeast event event along with several other leaders in the local industrial market on May 3. Register here.

Bisnow: What activity did the Atlanta industrial sector see last year, and where is the market heading in 2023?

Brown: In 2022, we saw significant industrial construction take place. We also saw somewhat of a retraction within the market because of its volatile conditions with supply chain issues and long lead times, among other factors. Our clients are getting creative to make deals work, and Catamount helps bring creative solutions to the table. We anticipate this continuing in 2023, and we are well posed to help our clients navigate these challenges.

Curry: In addition to Atlanta-area industrial demand, we continue to see coastal areas experience record-breaking demand while attracting a substantial portion of equity investment that has been limited elsewhere. There has been a strategic opportunity for us to open two new offices in the booming coastal markets of Savannah, Georgia, and Tampa, Florida. Savannah has the lowest vacancy rate in the country at 0.1%, and the Tampa Bay area is experiencing 20-year low vacancy rates as well. These offices will allow us to better serve both existing and new clients active in those markets.

Bisnow: Can you speak to Atlanta’s future project pipeline and tenant activation? How do these two factors impact the Atlanta industrial market?

Brown: Developers seem to be more conscious of having a particular tenant in mind when designing a space. Up until now, developers would go about a project by building on spec and not worrying about what tenant would occupy that space. But with a more intentional leasing approach, developers are looking to pursue end users for build-to-suit opportunities. We’re seeing a shift in mindset from developers on what type of product they're building and who’s going to use it.

Curry: We are still seeing a strong number of projects come across our desk. However, projects traditionally have moved much quicker from initial design and budget to the time a shovel goes in the ground. That time is much longer now as it becomes more difficult for deals to develop. We continue to work with our clients to explore all avenues of pricing, lead times and permitting that can help them get a deal done.

Bisnow: What build-to-suit/tenant improvement industrial projects are you working on?

Brown: Last year, we continued building on our long history of delivering build-to-suit projects, including the largest known castellated beam project in the country. In partnership with Trammell Crow, this 1.1M SF industrial build-to-suit building in Jefferson, Georgia, is a distribution center for Ace Hardware. Additionally, we completed Project Greenlight, a 420K SF, build-to-suit tilt warehouse facility in Rome, Georgia, for the Hillman Group with Hight Knox Properties and MDH Partners. Catamount handled site work, structural steel, concrete and interior office build-out.

Curry: We are excited to have several additional build-to-suit projects in the pipeline throughout the Southeast. Among them is a 187K SF build-to-suit manufacturing and office facility in Jefferson with one of our repeat clients. We are also proud to be constructing a 130K SF light manufacturing space to house Kamstrup’s U.S. headquarters in one of our recent spec builds.

Bisnow: What market trends is Catamount seeing in Atlanta? How do economic factors like inflation, interest rates and supply chain troubles impact Atlanta industrial?

Curry: We have seen deals put on hold or delayed due to financing, quality of land and construction costs so developers are having to be more creative to make projects happen. We are still seeing several materials experiencing long lead times including electrical panels, piping and most recently certain HVAC equipment. Concrete continues to be on allocation in some circumstances with expected future premiums. It has not manifested itself yet, but I think we will see some relief there as we move later into the year.

Brown: Economic factors are generating and driving these trends more than anything. With inflation and interest rates hitting record highs, we are creative in our pre-construction endeavors to help our clients meet the project pro forma.

Bisnow: How is Catamount helping its industrial clients in times of economic uncertainty?

Curry: On the front end, it boils down to value engineering and cost-efficiency. Whether it’s working with our site work contractors to reduce land development costs or structural engineers to produce more efficient panel dimensions, we are exploring every opportunity to help our clients get their project within budget.

Brown: We’ve done a few things to alleviate the market’s economic burden. In the electrical field, with switch gears being upward of 64 weeks out, we took the initiative as a company and purchased several large-amperage switch gears. We've been able to help out some developers by getting these products to the job more quickly. Catamount goes above and beyond for our clients in any way we can.

This article was produced in collaboration between Catamount Constructors and Studio B. Bisnow news staff was not involved in the production of this content.

Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to studio@bisnow.com.