ATLANTA—Upward momentum. Those are the best words to describe Atlanta's industrial market in the first quarter.

A new JLL report reveals lower vacancy rates and modest rental increases. Based on these two factors, along with tenant's desires for bigger, newer spaces, JLL reports an increase in industrial construction activity in Atlanta. Developers are considering a number of avenues to secure land for industrial use in desirable areas.

“The spigot is open for new development, and the focus is on bigger box spaces,” says Mike Sivewright, JLL's market director for the Atlanta region. “While build-to-suit projects still meet much of the need, speculative projects continue to become more pervasive.”

Let's dive into the stats. The vacancy rate for industrial properties stood at 8.3% at the end of the first quarter, down from 8.7% at the end of 2014. Net absorption reached 3.1 million square feet during the first three months of the year. The Airport/South Interstate 85 and Northeast submarkets were the objects of the vast majority of tenant demand, accounting for more than 80% of the net absorption.

There were several high-profile transactions in the first quarter. On the leasing front, Office Depot agreed to a new lease for 414,960 square feet at 1595 Heraeus Boulevard in Buford, GA. IntegraCore signed a new industrial lease for 304,000 square feet at 7280 Oakley Industrial Boulevard in Union City, GA. Hub One Logistics signed a new lease for 247,000 square feet at 3605 Royal South Parkway in southwest Atlanta.

On the acquisition front, DCT Industrial purchased a 505,000-square-foot warehouse at 301 Eagles Landing Parkway in Stockbridge, GA from the Henry County Development Authority for $14.1 million. LNR Property bought a 440,800 square-foot space at 5070 Phillip Lee Drive in west Atlanta from First Industrial & UBS Realty for $8.8 million. And DCT purchased 398,485 square feet of space at 435 Henry D Robinson Boulevard in Pendergrass, GA for $15.5 million.

“The market does not appear to be worried about oversupply as tenant requirements remain considerable,” says Wit Truitt, executive vice president for Industrial Brokerage at JLL. “Whether these tenants renew in their current space or seek new locations, the demand is there, and absorption continues to surpass new deliveries.”