Industrial is the New Retail

industrial contrcution

In the past, industrial investments in Atlanta have been about the preservation of capital, not the growth of it. But as Atlanta has emerged from recent recession, industrial properties are experiencing rising rents, something almost unheard of in this market. Because of increased demand from tenants and limited supply of industrial assets, industrial cap rates are lower than they have been in years – between 4.5-6% in most Atlanta submarkets.

One of the main influences on the rising rents is the fact that developers are taking it slow when it comes to building new industrial assets; this is keeping the supply down and making the space that is available more valuable to Landlords. But construction in Atlanta, industrial included, is on an upward swing and once some of the industrial product in the development pipeline is delivered, most assume we will see rates drop once again. Spec construction is expected to remain somewhat constrained as most major tenants have very product- and industry-specific requirements, like 36’ ceilings, room for trailer parking, etc.

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