Supply grows as vacancy rate climbs for fifth consecutive quarter

In Q2 2023, Atlanta’s industrial market showed signs of softening. The overall vacancy rate rose for the fifth consecutive quarter, up 30 basis points to 5.4% from 5.1% in Q1 2023. Despite the uptick in marketwide vacancy, rental rates rose 4.4% quarter over quarter, from $6.18 in Q1 to $6.45 in Q2, largely due to the increasing average cost basis of industrial buildings. Based on continued economic uncertainty, coupled with record-level rental rates, vacancy is predicted to continue to decompress over the next several quarters. Though vacancy will likely continue to rise, it is important to note that it still sits near record lows for the Atlanta market.

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