The Atlanta industrial market is experiencing high rent growth. Two suburban markets in southeast and northeast parts of the state had strong third quarters because of it, according to the latest market report from commercial real estate agency Franklin Street.
Industrial properties that specialize in logistics in Augusta and Gainesville both had 3% rent growth during the third quarter, according to the report. Flex industrial properties (buildings capable of a wide range of uses) and specialized industrial properties (which include refrigeration/cold storage facilities, data housing and manufacturing space) had a 2% rent growth during the third quarter.
Better price: Rents for all types of industrial properties in Augusta averaged $4.75 per square foot during the third quarter, according to the report. The average rent for all industrial properties in Gainesville averaged $6.26 per square foot during the same period. Rents in the Atlanta market averaged $7.16 per square foot in the third quarter, according to CoStar.
The 12-month rent growth in the Augusta market is 8.6%, while it is 9.1% in Gainesville, according to CoStar. Amazon’s delivery center in Augusta, which opened in October, is a major tenant that has helped raise the rent growth in that market.
Room for growth: During the third quarter, nearly 50 million square feet of industrial space was utilized in Augusta, while nearly 32 million square feet was utilized in Gainesville. The vacancy rate in Augusta decreased by 1.2% since the beginning of the year and is currently at 5.2%. The vacancy rate in Gainesville has gone the other way, increasing by 2.1% since the beginning of the year to 3.6%.The report lists the increase in vacancy to deliveries exceeding absorption. In Gainesville, 622,380 square feet of space has been built since the beginning of the year to answer those logistical needs. During that same period, 49,000 square feet of space was built in Augusta.
Help is on the way: The South Atlantic Supply Chain Relief Program (SASCRP), a collection of container yards strategically placed around the state, will soon begin helping ease congestion at industrial properties in Augusta, Gainesville and near ports in Brunswick, Columbus, and the state’s largest port, Port of Savannah.
What’s next: There is more than a combined 3 million square feet of industrial construction underway in Augusta and Gainesville, according to CoStar. Gainesville has the bulk of that construction with 2.8 million square feet, half of which is already leased.