\u201cWe had so much construction deliver in 2023 and 2024 that we\u2019re still kind of chipping away at that,\u201d said Lisa Pittman, the logistics and industrial services group leader for real estate service firm Cushman & Wakefield<\/a>.<\/p>\n ExploreWhy has a Georgia agency paused reviews of new data center proposals?<\/a><\/p>\n Atlanta\u2019s nation-leading data center market<\/a>, a niche segment of industrial space designed to house computer servers, has similarly seen its construction figures balloon over the past two years. But while demand for computer storage space has yet to skip a beat, the same can\u2019t be said for logistics warehouses and rentable manufacturing space.<\/p>\n The region\u2019s industrial vacancy rate has increased to 8.6%, more than double what it was in 2022, according to CBRE. The uptick is predominantly credited to a lack of large leases inked this year. No industrial lease larger than 500,000 square feet has been finalized in 2025.<\/p>\n That trend has hurt new buildings trying to attract large tenants. At least eight warehouses delivered to market since 2023 in metro Atlanta are completely vacant<\/a>, according to a survey by CBRE.<\/p>\n \u201cNo one in the leasing business likes to talk about a vacant anniversary,\u201d Kelley said. \u201cBut there\u2019s some anniversaries out there.\u201d<\/p>\n Cracking the whip<\/p>\n Real estate experts said Atlanta\u2019s industrial market is currently a classic example of the \u201cbullwhip effect.\u201d<\/p>\n Named after the unwieldy whips used to manage livestock, it\u2019s an economic principle used to explain how small changes in consumer demand can ripple through supply chains<\/a> and cause overcorrections. Kelley said it\u2019s a phenomenon all Americans witnessed firsthand<\/a> during the pandemic after grocery store shelves and used car lots were empty.<\/p>\n \u201cFive years ago, we couldn\u2019t find anything at all. Toilet paper, cars, semiconductors, T-shirts,\u201d he said. \u201cThen we had too much. That oscillation really shows up in real estate as well.\u201d<\/p>\n Credit: Jason Getz \/ Jason.Getz@ajc.com<\/p>\n Credit: Jason Getz \/ Jason.Getz@ajc.com<\/p>\n ExploreSharks \u2018smell blood\u2019 in Atlanta\u2019s office market as distress mounts<\/a><\/p>\n Metro Atlanta\u2019s steady population growth and influx of corporate investment insulated its industrial market from larger headwinds that have shaken other sectors\u2019 growth trajectory. The region\u2019s office market was fundamentally upended<\/a> by the pandemic popularizing remote and hybrid work schedules, which prompted record-setting vacancies and some notable foreclosures<\/a>.<\/p>\n The industrial market doesn\u2019t face the same existential demand threat nor the same pervasive loan distress, experts said. Several companies and real estate investment trusts have pumped money into industrial projects or acquiring warehouse portfolios in recent months.<\/p>\n Philadelphia-based Alterra IOS closed a $343.6 million loan<\/a> last week to acquire more than 350 industrial sites across the country, including in Atlanta. Canadian private equity firm Brookfield in July closed a $438 million deal<\/a> to buy a 53-property portfolio filled with industrial warehouses, including some in Atlanta.<\/p>\n Andy Smith, a Brookfield executive, said in a news release that industrial properties still present a strong investment opportunity despite \u201cincreased market uncertainty and rising replacement costs,\u201d referencing how inflation has ballooned the cost of new construction.<\/p>\n ExploreGeorgia job count surpasses 5 million for first time ever<\/a>\u2018Willing to recommit\u2019<\/p>\n Leasing activity, while soft given the amount of new space that\u2019s finished construction, has preserved some momentum.<\/p>\n Audrey Giguere, research manager for Cushman & Wakefield, said industrial lease signings increased more than 5% in the second quarter compared with the first quarter this year. Lease renewals jumped 25%.<\/p>\n \u201c(That) signals some confidence in the market with people being willing to recommit to their spaces in Atlanta,\u201d she said.<\/p>\n The amount of space available for sublease, while much higher than a few years ago, has remained fairly steady since late 2023. Real estate experts say the sublease market is a key indicator for measuring whether tenants are properly judging how much space they need<\/a>.<\/p>\n![\"A](\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2025\/07\/BG7S25ELYTTMXBEYJ2EK5KB5ZQ.JPG\")
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