The ongoing presence of third-party logistics (3PL) companies in Atlanta underscores the market’s role as the logistics hub of the Southeast. The city has emerged as a top three industrial market across the United States for 3PL leasing, having steadily gained share of new leasing activity in recent years, trailing only the Inland Empire and Central New Jersey today.
The growth of the sector in Atlanta has been driven by growing e-commerce demand and supply chain complexities as companies optimize operations amid volatile trade policy and heightened consumer expectations, according to a Cushman & Wakefield analysis. The market is beneficial for 3PLs thanks to access to neighboring Southeast markets, strategic infrastructure with connectivity to major highways, railways, Hartsfield-Jackson International Airport and the Port of Savannah.
“As trade conditions continue to fluctuate, retailers facing excess inventory and rising costs may increasingly leverage 3PLs, spurring demand for this sector across the market,” said the report.
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3PL activity has increased from 10.6% in 2021 to 29.5% of new leases above 50,000 square feet in 2024. The trend appears to be continuing this year, with the industry capturing a 32.7% share during the first quarter. Much of the recent activity nationwide has been driven by Asian-based firms, accounting for 27.8% of 3PL leasing last year in Atlanta, the report said.
Mid-sized 3PLs – those between 150,000 and 499,999 square feet – have dominated new leasing within this tenant type since 2021, accounting for more than half of all activity, said Cushman & Wakefield. Meanwhile, nearly 27% of 3PL leasing volume has been larger than 500,000 square feet.
Going into the second quarter this year, 3PL demand has continued, with BroadRange Logistics pre-leasing a 308,880-square-foot facility to expand its footprint across Atlanta in April. The related companies in the market have gravitated toward new construction, with buildings delivered since 2022 attracting 57% of new leasing activity. Even buildings not yet delivered are popular, as evidenced by Geodis and A1 Trucking pre-leasing buildings that are still underway. Modern facilities offer advantages that logistics firms are looking for, including greater clear heights, sizable truck courts, ample parking and the potential for automation, according to the report.
Within Atlanta’s submarkets, 3PLs have favored locations along the Interstate-75 corridor, which highlights the need for immediate access to major transportation routes. The study noted Interstate-20 West and Interstate-85 South have trailed in logistics demand.
Going forward, economic headwinds and uncertainty could cause retailers, wholesalers, and e-commerce firms to cut costs and rely on 3PLs, though possible declines in port volume and consumer spending could pose challenges, the report warned.
“Despite an ever-changing environment, Atlanta’s strong consumption and distribution market, supported by strategic access to highways and ports, ever-growing population, and rising median household income, is likely to remain a tailwind and is poised for persistent industrial demand,” said Cushman & Wakefield.
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Kristen Smithberg
Kristen Smithberg is a Colorado-based freelance writer who covers commercial real estate, insurance, benefits and retirement topics for BenefitsPRO and other industry publications.
