SUTTON REALTY ADVISORS
ATLANTA, GA
TRENDS & INSIGHTS
Q2 2026
8.7%
VACANCY RATE
7.2 M SF
YTD ABSORPTION
3.5 M SF
NEW SUPPLY
11.6 M SF
UNDER CONSTRUCTION
In Q2 2026, the Atlanta industrial market continued to stabilize. About 40% of leasing activity was concentrated in deals over 500,000 SF. Newer and larger spaces continue to lease quickly while smaller, more outdated facilities are taking longer to lease. Year-to-date absorption totaled 7.2 million square feet, but vacancy ticked up to 8.7%, from 8.5% the previous quarter.
New supply picked up in Q2, with 3.5 million square feet delivered. The construction pipeline remained relatively flat, as developers are waiting on the sidelines for the current available spaces to be leased. As market confidence continues to improve, developers are expected to move forward with planned projects, leading to a gradual increase in the construction pipeline.
The Blue Ridge Connector in Gainesville was completed in May 2026, providing a direct rail link to the Port of Savannah. The new inland port is expected to strengthen connectivity between Atlanta and the Port of Savannah and decrease truck delivery times. Hyundai’s SK battery plant was completed in June 2026. This $5 billion, 3.3 million-square-foot facility in Bartow County will provide around 3,500 jobs.
Overall, the Atlanta industrial market will continue to normalize through the remainder of 2026, supported by steady occupier demand and a moderating development pipeline.
TRENDS & INSIGHTS
Q1 2026
8.5%
VACANCY RATE
4.7 M SF
YTD ABSORPTION
1.4 M SF
NEW SUPPLY
11.6 M SF
UNDER CONSTRUCTION
The Atlanta industrial market continued to stabilize in Q1 2026, with bulk transactions accounting for a significant share of activity. Deal flow is increasingly concentrated in larger spaces, particularly those 800,000 square feet and above. Year-to-date absorption totaled 4.7 million square feet, helping push vacancy down to 8.5%.
Leasing activity reflects growing tenant confidence, as occupiers continue to commit to larger spaces and longer-term deals rather than prioritizing short-term flexibility. At the same time, owner-user demand has picked up, driven by rising rental rates and a greater desire for operational control. This trend has contributed to increased investment activity, highlighted by the $129.7 million acquisition of a 1.1 million- square-foot facility at Chattahoochee Logistics Center.
Development momentum also strengthened early in the year, with the construction pipeline expanding to 11.6 million square feet—more than half of which is speculative. Ongoing infrastructure improvements continue to support the region’s logistics advantages, including the Blue Ridge Connector in Gainesville, which is expected to open in May 2026 and enhance connectivity between Atlanta and the Port of Savannah. Overall, the market appears well-positioned for more sustainable growth through 2026, supported by strong bulk demand and a more balanced development pipeline.
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.
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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.
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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.
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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.
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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.