SUTTON REALTY ADVISORS
SAVANNAH, GA
TRENDS & INSIGHTS
Q2 2025
11.4%
VACANCY RATE
3.7 M SF
YTD ABSORPTION
4.7 M SF
NEW SUPPLY
4.3 M SF
UNDER CONSTRUCTION
The Savannah industrial market posted 1.1M SF of net absorption in Q2 2025, despite 4.7M SF of new spec construction deliveries to the market and several large move-outs. Year-to- date absorption totals 3.7M SF (vs Atlanta’s 0.3M SF). The total Savannah industrial market inventory has increased year-over-year by 24M SF (17.5%), from 137M SF at the end of Q2 2024 to 161M SF at the end of Q2 2025.
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The vacancy rate currently stands at 11.4%, up 120 bps from the previous quarter. Buildings greater than 500,000 SF represent 41% of the 18M Total SF of vacant space. When tariff uncertainty subsides, several large users are expected to re-enter the Savannah market, which would quickly bring vacancy back to single digits before year-end. New deliveries for the remainder of 2025 will be at their lowest levels since 2017. The lack of new supply moving forward is expected to propel positive absorption and lower vacancy into 2026.
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Rental rates for Class A space have remained flat during 2025, with most concessions being granted in the form of free rent. Rental rates in the Class A category are well surpassing the second-generation Class B sector (half tilt or all metal). This trend is expected to continue both in Savannah and nationally as users upgrade to higher-quality modern facilities.
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The Georgia Ports Authority has shown resilience in 2025 with over 2.5M TEUs being handled through May of 2025, up 8% from the end of Q2 2024. March, April, and May of 2025 had three consecutive months of TEU volumes over 500,000 per month for the first time on record. TEU volume projections are expected to exceed 8M by 2030. GPA has invested $1.2B in its facilities in the last 10 years and plans to invest another $2.5B over the next 10 years to expand its container handling capabilities, which will translate to continued strong growth for the Savannah Industrial Market.
TRENDS & INSIGHTS
Q1 2025
10.2%
VACANCY RATE
2.6 M SF
YTD ABSORPTION
4.2 M SF
NEW SUPPLY
8.5 M SF
UNDER CONSTRUCTION
The Savannah industrial market posted 2.6M SF of net absorption through Q1 2025 (vs Atlanta 0.9M SF). Vacancy increased to 10.2% following 4.2M SF of new deliveries, primarily consisting of speculative bulk projects over 500,000 SF. Eight properties over 500,000 SF represent 50% of the current total Savannah industrial vacancy rate. Three new leases over 500,000 SF were signed in Q1, and leasing activity was very strong across all size ranges.
The construction pipeline decreased to 8.5M SF and is down 61% from Q1 2024. Vacancy is expected to peak in Q2 with new deliveries dropping significantly in the second half of the year. Only six new projects are being delivered in Q3 and Q4 combined vs thirteen in Q2 2025.
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Tenants, owners, and developers are all monitoring the current tariff standoff with China, which represents a material percentage of TEU volume. Q1 2025 did have several bulk lease deals go on hold due to the uncertainty, but they are expected to re-enter the market. Several longer-term participants are moving forward with their transactions regardless of the US trade shift away from China. TEU Volumes have reached all-time highs for Savannah but are expected to drop in Q2 due to these headwinds.
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Longer term, the State of Georgia is investing $4.5B into the expansion of the Port of Savannah. Conservative annual TEU growth estimates range from 8-10M for 2030 and up to 20M annual TEUs by 2050. The current capacity is 5.6M TEUs per year. The continuous upward trajectory of TEU capacity led by the State of Georgia and Georgia Ports Authority will drive long-term industrial market growth and rent growth for Class A properties that are well located to the Port of Savannah for the next several decades.
TRENDS & INSIGHTS
YEAR END 2024
9.4%
VACANCY RATE
8.0 M SF
YTD ABSORPTION
4.6 M SF
NEW SUPPLY
10.2 M SF
UNDER CONSTRUCTION
Through Q4 2024, the Savannah Industrial Market posted a Year-End Absorption total of 8M SF. This excludes the delivery of the 12M SF Hyundai Megaplant. The total Savannah industrial market has doubled in size over the last four-year period, and is now equal to 150M SF.
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Vacancy increased to 9.4% following the delivery of approximately 13M SF of speculative space to the market in 2024. The amount of industrial product under construction has slowed to 10.2M SF, of which 7M SF is speculative. The current vacancy rate of 9.4% is expected to decline in 2025 subject to historical leasing volumes remaining strong. As the Southeastern United States continues to grow above the national average, the Port of Savannah will be the benefactor of the region’s success.
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TEU volumes have increased by 13% year-over-year from November 2023 to November 2024. The Georgia Ports Authority projects annual TEU volumes to reach 10M by 2030 and 20M TEUs by 2050. The Port of Savannah is currently implementing a $4.5B expansion over the next twelve years to achieve these projections.
TRENDS & INSIGHTS
Q3 2024
9.3%
VACANCY RATE
8.5 M SF
YTD ABSORPTION
3.2 M SF
NEW SUPPLY
11.0 M SF
UNDER CONSTRUCTION
Through Q3 2024, Savannah’s year-to-date absorption of 8.5M SF is equal to Atlanta’s year-to-date total through the same period. Many new spec projects have been delivered in 2024 and rental rates have declined slightly in the near term. Most leasing activity in 2024 has been in the 100,000 to 400,000 SF size range, although recent prospects cover all size ranges, including bulk distribution.
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Class A, well-located spec deliveries continue to benefit from consistently strong leasing volumes. As the current 11M SF construction pipeline continues to drop, 2025 rental lease rates will increase again in conjunction with proven annual increases in the port’s projected TEU volumes.
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The Port of Savannah’s year-to-date TEU volume of 4,131,009 is up 13.5% Q1 through Q3 of 2024, compared to the same period for 2023. TEU volumes for September 2024 were up 11.9% over September 2023. Overall container capacity is currently equal to 6M TEUs per annum and is projected to grow to 9.5M TEUs by 2026.