SUTTON REALTY ADVISORS
ATLANTA, GA
TRENDS & INSIGHTS
Q4 2025
9.0%
VACANCY RATE
5.8 M SF
YTD ABSORPTION
0.5 M SF
NEW SUPPLY
9.0 M SF
UNDER CONSTRUCTION
In Q4 2025, the Atlanta industrial market gained significant momentum with YTD absorption reaching 5.8 million SF. The Northeast submarket accounted for 4.3 million SF of this absorption. Leasing activity was strong in Atlanta, with three leases exceeding one million SF signed. Two of these were renewals signed by manufacturing giants, Carter’s and Smucker’s. This rise in leasing activity led to a decline in vacancy to 9.0%.
The construction pipeline expanded to 9.0 million SF in Q4, after many quarters of contraction. The I-85 North and I-85 South submarkets contributed the most new product in 2025. Mid-size buildings ranging from 150,000 to 500,000 square feet accounted for the majority of new construction. Continued development activity within this size segment suggests the trend will carry forward in the coming quarters.
In Q4, rental rates remained relatively stable at $7.57 PSF, though they continued to reflect strong long-term growth. The GA-400 submarket recorded the highest year-over- year increase, with rates rising nearly 22% from Q4 2024. Vacancy in Class A buildings continues to decline as tenants increasingly favor more modern, efficient facilities.
The Atlanta industrial market showed renewed investment activity in Q4, with transaction volume exceeding $1.3 billion. Hillwood acquired a 1.2 million SF portfolio from Blackstone for $181.4 million ($148/SF). A confidential user acquired 1.2 million SF at The Cubes at Bridgeport for $133 million ($111/SF), representing the largest occupancy recorded this quarter.
TRENDS & INSIGHTS
Q3 2025
9.4%
VACANCY RATE
2.4 M SF
YTD ABSORPTION
3.9 M SF
NEW SUPPLY
6.8 M SF
UNDER CONSTRUCTION
Atlanta’s industrial vacancy rate inched up to 9.4% in Q3 2025, up slightly from 9.3% in the previous quarter. The modest rise was driven by the delivery of several large speculative projects, including 1.0 million square feet of new supply in the I-20 East submarket.
Year-to-date absorption climbed to 2.4 million square feet, a notable improvement from 0.3 million square feet in Q2. Key lease transactions included U.S. eLogistics’ 633,269-square-foot lease at West Fulton Commerce Park (I-20 West) and Elogistek’s 494,804-square-foot lease at Downtown Buford Logistics Center (Northeast/I-85). Tenants continue to favor newer buildings—in Q3, nearly half of all new leases were signed in warehouses delivered since 2020 or not yet built. Sublease space availability also surged, rising nearly 50% year-over-year.
Developers delivered 3.9 million square feet of new space in Q3, including 538,919 square feet at Stonemont Park 75 South (Southeast/I-75) and 346,850 square feet at Westlake 5950 (I-20 West). While the overall pipeline remains constrained, new construction showed signs of life, with build- to-suit projects accounting for over half of Q3’s groundbreakings. However, spec development continues to lead activity, accounting for nearly 75% of year-to-date starts. Average asking rents edged up to $7.58 per square foot (NNN). The GA 400 submarket led the metro area, with rates increasing 16.5% year-over-year, the highest among all submarkets.
Overall, Atlanta’s industrial market reflected both resilience and ongoing adjustment in Q3. Leasing activity remained muted as tenants approached decisions cautiously, while investment activity showed renewed momentum. The market’s trajectory will continue to depend on broader economic stability—if interest rates hold steady and trade policies become clearer, renewed confidence among consumers and major industrial users could drive stronger growth by year-end.
TRENDS & INSIGHTS
Q2 2025
9.3%
VACANCY RATE
0.3 M SF
YTD ABSORPTION
4.4 M SF
NEW SUPPLY
6.4 M SF
UNDER CONSTRUCTION
The Atlanta industrial market showed signs of stagnation through the first half of 2025, with Q2 reflecting a clear slowdown in activity. Due to a decline in larger-scale deals and major move-outs, Atlanta had its first quarter of negative net absorption since Q4 2023. Despite this, the Atlanta Northeast submarket experienced a positive quarterly absorption of 1.4 M SF, well above all of Atlanta.
​
As a result of Atlanta’s negative quarterly absorption, the vacancy rate increased to 9.3%, its highest in over a decade. This pullback in bulk leasing appears to reflect a market correction, as many occupiers over-secured long-term space commitments in recent years, reducing current demand. In addition, Atlanta is losing population growth to tier II and tier III cities such as Charlotte, Nashville, Tampa, and Chattanooga.
​
The average lease rate remained flat at $7.71 NNN psf. Landlords are holding pricing power in smaller, newer spaces that are closer in. On the other hand, Landlords in second-generation bulk warehouse spaces located farther out are seeing reduced leverage in negotiations, with asking rents beginning to soften in these submarkets. In general, newer buildings are more favored by tenants than second-generation, less modern buildings.
​
4.4 M SF of new supply was delivered in Q2, and the construction pipeline fell to 6.4 M SF, its lowest in over a decade. Moving forward, developers are likely to take a cautious approach, prioritizing build-to-suit and smaller spec projects that better match current demand and leasing pace.
​
Overall, broader economic and political uncertainty weighed on the sentiment of both tenants and investors. Leasing activity may stay subdued in the near term, but should rebound once confidence and large-space demand pick back up.
TRENDS & INSIGHTS
Q1 2025
8.7%
VACANCY RATE
0.9 M SF
YTD ABSORPTION
2.1 M SF
NEW SUPPLY
10.3 M SF
UNDER CONSTRUCTION
The Atlanta Industrial market absorbed 0.9M SF in Q1 2025, 78% of the YTD Absorption being in the Northeast Atlanta submarket. The vacancy rate rose slightly to 8.7% due to bulk second-generation move-outs plus spec deliveries. 2.1M SF of new supply was delivered to the market in Q1 2025, and the current development pipeline is at its lowest level in ten years.
​
The average lease rate decreased slightly to $7.71 PSF NNN. Due to lower new deal velocity, Landlords are currently offering higher concessions, typically in the form of free rent. In the near term, solid credit tenants hold significant bargaining power for both new leases and renewals. This is expected to change in Q3 and Q4, should tariff uncertainty subside and pent-up demand re-enters the market.
​
Higher yield requirements have also slowed the pace of new project starts over the last two years. An interest rate cut by the Federal Reserve later in 2025 would spark many transactions currently on the sidelines. Fewer upcoming new deliveries are expected to bring downward pressure to vacancy rates in Q3 and Q4 2025 through 2026. Atlanta and the Southeast will continue to experience population growth, which will continue to drive industrial land acquisitions and spec development further out from Atlanta, in all directions, wherever infrastructure, interstate access, labor, and government entitlements are available. The pace will depend on the overall National and Southeastern economy.
Through Q4 2023, the Atlanta industrial market absorbed 6.8M SF on an annual basis. Projects that are still underway total nearly 26 million square feet. The vacancy rate has also increased to 6.8%.