ProLogis Signs Two Large Industrial Leases

Innotrac provides fulfillment and order processing for direct-to-consumer marketers. Its distribution space at Progress allows quick access to Interstate 85 and was previously leased to ProLogis customers such as Toys R Us and Anderson Merchandisers.

Auto Metal Direct, a provider of automotive sheet metal, is also a continuing customer of ProLogis. Its new distribution space is located off Interstate 985 in Buford, 37 miles northeast of Atlanta.

"While economic conditions are still challenging, signing two new leases for more than 100,000 square feet each is indicative of ProLogis' leading market position and ability to provide well-located, high-quality facilities in the Atlanta area," says Rodney Davidson, first vice president and market officer. ProLogis is the largest industrial landlord in the Atlanta market with a portfolio of 19 million square feet.

Terms of both leases were not disclosed. Direct asking rents within Atlanta's industrial market have stabilized over the past year at approximately $4 per square foot, according to Cushman & Wakefield.

The market reported 1.1 million square feet of negative absorption through the first nine months of this year, the first time for minus numbers in the sector since 2002, says Chris Shaner, senior research associate with Cushman & Wakefield in Atlanta. Roughly 7.9 million square feet were leased through the third quarter, mostly by way of consolidations and renewals as companies fine tune their supply chains, he says.

Overall industrial vacancy throughout Atlanta increased by a percentage point since the start of the year to 10.2%, yet is still well below the local market peak of 14.6% in 2004, according to Cushman & Wakefield. Investment sales activity fell by half over the same nine-month period last year, to 3.6 million square feet.