Executive Summary

Q2 in Review 

Metro Atlanta’s industrial market recorded 13.4 million square feet (msf) of total leasing activity during the second quarter of 2026, a 6.1% increase from the 12.6 msf recorded in Q2 2025 and the strongest quarterly leasing total in over a year. Demand was concentrated along Atlanta’s northern logistics corridors, with I-85 North generating 4.8 msf of leasing activity, up 19.1% YOY, and I-75 North documenting 2.3 msf, up 34.2%. Occupier demand was also pronounced south of Atlanta: I-75 South transactions nearly doubled to 2.0 msf, while Airport/South Atlanta posted 2.1 msf of leasing activity, a 27.7% annual increase. The gains helped offset a sharp contraction in signed deals within I-20 West, where leasing declined by 62.3% to 971,653 sf, the submarket’s first quarterly total below 1.0 msf in nearly three years.

Atlanta’s active construction pipeline expanded to 17.0 msf at quarter’s end, a 43.5% increase from the 11.9 msf underway at the same point in 2025. The pipeline is heavily weighted toward bulk distribution/warehouse product in the I-85 North and I-75 South corridors. Developers completed 6.3 msf of new industrial product in Q2 2026, up from 5.8 msf in Q2 2025. I-75 North was the primary driver as the 3.3 msf Hyundai SK Battery Plant delivered in Kingston. The facility’s delivery spurred a surge in occupancy growth in the submarket, though net absorption in Metro Atlanta moderated to 476,009 sf in Q2 2026. A string of large move-outs in I-85 North dampened absorption for the quarter, notably Broadrange Logistics vacating 1.0 msf at the Pendergrass Commerce Center, contributing to more than 1.6 msf of net absorption loss in the submarket. Despite the introduction of large vacancies, the metro-wide vacancy was stable at 9.1%, just 10 basis points (bps) above the rate in Q2 2025.

Average NNN asking rents ticked down to $8.91 per square foot (psf) in Q2 2026, a 2.0% decline from $9.09 psf reported in Q2 2025. Steadily rising vacancy has given tenants more options, eroding the pricing power landlords once commanded. Asking rent growth has been further mitigated by recent move-outs in the market’s more peripheral areas, where rents tend to trail the broader market. However, strengthening occupier demand is expected to exert downward pressure on vacancy in the coming quarters, gradually restoring rental rate appreciation toward the end of the year.

SUPPLY & DEMAND

KEY MARKET INDICATORS

MARKET OVERVIEW

ATLANTA ECONOMIC UPDATE

Metro Atlanta’s labor market lost momentum in May 2026, with total nonfarm employment unchanged from one year prior, slowing from the 0.4% annual gain recorded in April. Construction employment declined by 1.4% annually to 154,900 jobs as the pace of activity continued to moderate across both multifamily and commercial real estate development. Manufacturing remained in a prolonged downturn, with payrolls falling 1.7% YOY to 176,300 jobs. Employment in the trade, transportation, and utilities sector also contracted, falling by 0.7% to 646,600 payrolls, although that marked a notable improvement from the steeper losses recorded during the first quarter. Despite softer employment trends, Atlanta’s long-term logistics outlook remains favorable. Continued e-commerce expansion, particularly in lastmile distribution, is expected to support future job growth across the transportation and warehousing sector. That outlook was reinforced by the May opening of the 104-acre Gainesville Inland Port, which enables businesses to move import and export cargo more efficiently through a direct Norfolk Southern rail connection to the Port of Savannah.

Atlanta also stands to benefit from the Georgia Ports Authority’s ongoing investment in the Port of Savannah, which handled a 2026-high of 512,684 TEUs in May, up 2.4% YOY. This year, the port surpassed the halfway point of its nearly $1.6 billion expansion of Ocean Terminal, a project expected to increase the terminal’s annual container capacity from 200,000 TEUs to 1.75 million TEUs. As cargo volumes continue to grow, Metro Atlanta is well positioned to capture additional demand for warehousing and distribution facilities throughout the region.l Airport and proximity to the Port of Savannah—remains a compelling draw for distribution and e-commerce users. These structural advantages are expected to underpin healthy industrial demand throughout 2026.

LEASING ACTIVITY ACCELERATED

Metro Atlanta recorded 24.0 msf of leasing activity during the first half of 2026, up 8.8% YOY. Powering the increase was I-85 North, where transactions climbed 35.8% YOY to 8.8 msf. The submarket was bolstered by the 589,680-sf GigaCloud Technology renewal at 1380 Jesse Cronic Rd. in Braselton and the 550,000-sf Veyer lease of the former Home Depot space at Hamilton Mill Business Center in Buford. The I-75 North submarket boasted 3.8 msf of leasing YTD, up 28.0% YOY, driven by demand from largeformat distribution users, such as PACTRA International’s new 691,667-sf lease at International Commerce Center in Adairsville. Airport/South Atlanta recorded 3.5 msf of leasing YTD, up 21.0% YOY, buoyed by US Elogistics Service Corp. securing 571,517 sf at the recently delivered Gillem Logistics Center – Bldg. 600 in Forest Park and GXO Logistics signing for 556,800 sf at the South Creek distribution center in Fairburn.

OCCUPANCY GROWTH TRENDED UPWARD

Net absorption totaled 5.7 msf YTD, representing a significant improvement from the 1.0 msf of occupancy gains during the same period in 2025. The recovery has been driven by a combination of large-block occupancies and the continued lease-up of projects delivered last year. I-85 North and I-75 North each tallied 2.5 msf of net absorption YTD, together accounting for nearly 90.0% of metro-wide occupancy growth. Airport/South Atlanta boasted 573,797 sf of net absorption this year, a reversal from the 2.7 msf of occupancy loss in 2025. The metrowide vacancy rate ended Q2 2026 at 9.1%, just the third quarter in which the percentage of vacant space has exceeded 9.0% in the past 12 years. Vacancy remained elevated in Airport/South Atlanta and I-75 South at 10.8% and 11.6%, respectively. However, with leasing activity tracking at its strongest pace in over a year, Metro Atlanta is well-positioned for vacancy compression by year’s end.

CONSTRUCTION PIPELINE REMAINED CONSTRAINED

Completions remained historically low with 8.8 msf of product delivered YTD. Outside of the 3.3-msf Hyundai SK Battery Plant in I-75 North, the bulk of new construction was concentrated in I-75 South (1.7 msf) and I-85 North (1.4 msf), highlighted by the 933,656- sf Prologis 75 Commerce Center in Jackson, which was fully pre-leased to Amazon, and a 426,872-sf distribution center at 0 Atlanta Hwy. in Flowery Branch that was pre-leased to U.S. Immigration & Customs Enforcement prior to completion. An additional 17.0 msf of product is under construction across Atlanta, 32.2% of which is pre-leased. The three largest projects underway are all situated in the I-75 South corridor — Riverview Business Park – Bldg. 300 and River Park E-Commerce Center Bldg. 11A in Jackson, and PNK Griffin 200 in Griffin — each exceeding 1.0 msf and fully available.

RENTAL GROWTH SLOWED

Average NNN asking rents in Q2 totaled $8.91 psf, marking the third consecutive quarter below $9.00 psf after remaining at or above that threshold every quarter from Q1 2023 through Q3 2025. With nearly 19.0% of the 86.8 msf of product delivered in Atlanta from 2022 to 2024 vacant, landlords have faced heightened competition from newly built supply, constraining rent growth. I-75 South and I-85 South recorded the sharpest declines in Q2, with asking rates falling by 36.9% and 13.6%, respectively. Even so, declines were not widespread, as six submarkets posted YOY gains during the quarter, including I-75 North (+3.9%) and I-20 East (+1.2%).

INVESTMENT SALES

More than $1.1 billion in industrial sales closed during Q2, propelling the YTD total to $2.3 billion, an 83.3% YOY increase. Average pricing reached $130.91 psf in Q2, roughly in line with the prior quarter but up 3.0% YOY. The quarter’s largest transaction was the sale of the four-building Horizon Pointe Business Center in Suwanee to Ares Real Estate Income Trust, Inc. for $187.8 million, or $135.42 psf. The property was fully leased at the time of sale and was acquired from Clarion, which had purchased the first three buildings in 2018 and the fourth in 2020 for a combined $164.0 million.

For More Information, Contact:

Alex Kaplan
SVP of Research
tel 404 850 0667
[email protected]