Vacancy continues to climb as the market softens

Atlanta’s industrial market continues to soften in the third quarter of 2023. Having risen 170 basis points year over year, vacancy now averages 5.8%. Rental rates have also continued to rise despite the increase in vacancy throughout the market. Rental rates rose 21% year over year, from $5.69 in Q3 2022 to $6.88 in Q3 2023. This is largely due to elevated construction costs and a large pipeline of quality new product. As the market continues to stabilize while grappling with economic uncertainty, vacancies are expected to climb over the upcoming quarters. Vacancy is still below where it was in 2020 and earlier, so conditions are still relatively tight compared with Atlanta’s own market history, and Atlanta maintains a foothold as an industrial cornerstone in the Southeast.

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