South Atlanta’s industrial sector saw minimal new supply in the first quarter of 2025, according to a market report by Colliers. Market performance varied depending on the comparison period, but the report highlights that development activity declined to its lowest level since the start of the current cycle, with new construction nearly absent during the quarter.
New industrial supply in South Atlanta declined sharply in the first quarter of 2025, totaling approximately 100,000 square feet. This represents a significant decrease from the 2.5 million square feet delivered in the previous quarter and 2.2 million square feet in the same period last year. According to Colliers, “Following six consecutive quarters with more than 2.0 million square feet of deliveries, supply growth cooled to begin the year and the development pipeline has retreated to its lowest mark since 2014.”
Other market fundamentals showed mixed trends depending on the comparison period. The average asking lease rate increased 6% year-over-year to $7.88 per square foot NNN, but this figure was down from $8.05 per square foot in the fourth quarter. Colliers attributed the quarterly decline in asking rates to softening demand.
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The vacancy rate rose by 3.3 percentage points over the past year, reaching 9.6% at the end of the first quarter. However, this was only a 10 basis point increase from the previous quarter8. Net absorption turned positive, with 600,000 square feet absorbed in the first quarter, compared to negative absorption of 1.1 million square feet in the prior quarter. Despite this improvement, demand remained below the level recorded a year ago, when 2.1 million square feet were absorbed.
Looking ahead, Colliers anticipates improvement in industrial occupancy for South Atlanta, citing recent leasing activity as a positive indicator. Notable transactions included a 485,000-square-foot renewal at Innovation Logistics Center and a 271,000-square-foot lease at SouthPark. Colliers concluded that “fundamentals remain stable and are expected to attract additional investment interest in one of Atlanta’s most dynamic industrial submarkets.”
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