Advantis Bullish on Industrial Sector

That's the first-quarter assessment of Advantis Real Estate Services Co., the locally based brokerage arm of Jacksonville, FL-based St. Joe Co.

The brokerage remains bullish despite a first-quarter vacancy level of 9.3% versus an average 8.7% for all of 2000; net absorption of 1.9 million sf (23,000 sf less than the same 2000 period); and a below average absorption of 1.6 million sf in bulk warehouse product.

"The metro Atlanta industrial market is still in the midst of a growth phase, exemplified by the tremendous level of new development and tenant demand," says John DeCouto, a senior Advantis industrial broker.

He notes the first quarter of the last two years "has been slow to absorb space. And while in 2000, the remaining three quarters experienced heightened absorption, it will be pivotal for the remainder of 2001 to have the same performance in order to have a successful year."

He has no doubts "the technology fallout of late 2000 and early 2001 will have an effect on the industrial market, but to what extent remains to be seen."

He is confident the last three quarters of this year "will determine the real world impact of the technology bust."

Meanwhile, the bulk warehouse development juggernaut in Atlanta keeps rolling along. Of the 10.7 million sf in new first-quarter construction, bulk warehouse accounted for 7.8 million sf.

About 65% of new bulk warehouse is being developed in the Northeast and South Atlanta submarkets. A total 4.5 million sf of general industrial product surfaced in the first quarter.

"New deal activity remains at a heightened level due to new business growth and expansion," says DeCouto. "However, a portion of this activity is on hold as many companies wait for stock market stabilization."

He sees the displacement of tenants in the South Atlanta submarket by the expansion of Hartsfield Atlanta International Airport as a spur for new activity on the south side of Atlanta.

"In the Northeast sector, the market should experience new growth as well, as new development creeps northward along the I-85 corridor," DeCouto projects.

The 44.9 million-sf flex space market, however, is a different story. The average vacancy mark of 14.6% was affected by a 28.2% vacancy level in the Chattahoochee submarket; 17.2% vacancy in the Northwest; 15.1% vacancy in the Northeast; and 14.4% vacancy in central Atlanta.

Among the major sales, the highest per-sf honors for price paid goes to Camp Creek Business Center, which shelled out $17.3 million or $67.16 per sf for the 257,580 sf at 3800 Camp Creek.

The largest bulk purchase was made by Metronexus/Cone Atlanta, which paid $25 million or $26.57 per sf for 941,000 sf at 1033 Jefferson Ave.

Other notable transactions were First Chicago Leasing's $20.7 million purchase ($57.93 per sf)of 357,300 sf at 2700 Crestridge Court; Sugarloaf NF Industrial payment of $6.7 million ($55.83 per sf) for 120,000 sf at 1645 Satellite Blvd.; Pinion Properties' acquisition of $8.7 million ($43.46 per sf) for 200,200 sf at 1200 Chastain Rd.; Cabot Industrial Property, $12.3 million ($42.99 per sf) for 286,140 sf at 2980 Evergreen Dr.; and Satellite Triangle Property, $19.4 million ($39.16 per sf) for 495,436 sf at 1600 Distribution Park.

Major leases in the estimated five-to-10-year range were ARDC taking 280,000 sf at 2251 Sylvan Rd.; GES leasing 200,000 sf at 750 Maxham Rd.; Carlisle Tire, 106,000 sf at 825 Maxham Rd.; FedEx Ground, 85,000 sf at 3765 Atlanta Industrial Dr.; and EIS Inc., 62,500 sf at 4175 Royal Dr.