It comes as no surprise then that the Atlanta industrial marketwent through a major adjustment in 2009, recording the largestoccupancy loss ever in a year. Tenants gave back almost 3.3 millionsquare feet of industrial space over the past 12 months, accordingto a recent Colliers International report. Industrial vacancy inthe city has increased 0.8% from 2008 and finished the year at13.3%, the highest industrial vacancy rate ever recorded inAtlanta's history.

Given the city's dominance in both housing construction andpopulation growth over the past decade, the economic downturnimpacted the industrial market the most, explains Mike Spears,senior vice president and manager at Colliers. "The majority ofMetro Atlanta jobs lost in 2009 were in manufacturing andconstruction, closely associated with the local housing market.Tenants in these industries found themselves no longer in need oftheir industrial spaces causing demand to plummet and vacancy torise," he says. Still, pockets of demand remained. Food industrytenants--like Smuckers, Kraft and Trader Joe's--provided much ofAtlanta's industrial leasing activity throughout the year, signingsome of the largest deals in the region.

Although located just outside of the Colliers tracked industrialmarket, General Mills signed for a distribution facility of 1.5million square feet, which was the region's biggest deal in 2009."The company's decision on location further solidifies Atlanta asthe major distribution hub in the southeast," says Spears.