- South Atlanta added just 100,000 SF of new industrial space in Q1 2025—the lowest quarterly delivery since 2014.
- The vacancy rate rose 3.3 percentage points year-over-year to 9.6%, while rents declined quarter-over-quarter despite a 6% annual increase.
- Net absorption turned positive after a weak end to 2024, suggesting early signs of market stabilization driven by large lease renewals.
A Sharp Slowdown
South Atlanta’s industrial supply hit the brakes in Q1 2025, with just 100,000 SF of new space delivered, per Globe St. The dramatic pullback marked a stark contrast to the 2.5M SF delivered in Q4 2024 and 2.2M SF in the same quarter last year. According to Colliers, this drop ends a six-quarter streak of over 2M SF in new deliveries, bringing the development pipeline to its lowest level since 2014.
Mixed Market Signals
Key indicators in the market painted a mixed picture. Average asking rents climbed 6% year-over-year to $7.88 PSF NNN but slipped from $8.05 in the prior quarter, a sign that demand has begun to soften. Meanwhile, vacancy rose to 9.6%, up 3.3 percentage points from a year ago and slightly from the previous quarter.
Despite those headwinds, the market did show signs of renewed industrial supply demand. Net absorption rebounded to 600,000 SF in Q1 2025 after recording negative 1.1M SF in Q4 2024. Still, that number lags well behind the 2.1M SF absorbed during the same period last year.
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Big Leases Provide Optimism
Recent leasing activity points to potential stabilization ahead. Two major deals—the 485,000 SF renewal at Innovation Logistics Center and a 271,000 SF lease at SouthPark—helped support net absorption and could signal improving tenant demand moving forward.
Looking Ahead
While fundamentals have softened compared to 2024, Colliers remains cautiously optimistic. With industrial supply easing and key leases in place, South Atlanta could attract increased investor interest in the coming quarters. The submarket remains one of Atlanta’s most active logistics hubs and may benefit from a more balanced supply-demand dynamic as 2025 progresses.
