Atlanta’s Vacancy Rate Dips and Leasing Activity Increases for the Quarter
EXECUTIVE SUMMARY
The Atlanta industrial market experienced a rebound in Q3 2025 with improved leasing activity and positive absorption. Leasing activity rose to 8.2 million square feet during the quarter, an 18.1% increase from the previous quarter but down 38.6% from last year’s levels. Major transactions that occurred in Q3 2025 included GXO Logistics, Roses, Staci Americas, and Burr Computer Environments Inc. Net absorption posted a significant improvement, recording 1,666,535 square feet for the quarter, up from -2,285,086 square feet in Q2 2025 and down from 3,394,667 square feet in Q3 2024. Demand has concentrated mostly on Warehouse/Distribution properties, with Manufacturing and Flex spaces underperforming or remaining flat.
The vacancy rate fell 20 basis points over the quarter from 8.9% to 8.7% and increased 170 basis points year-over-year from 7.0% as new deliveries continued but were outpaced by demand. The market remains in neutral conditions (8% to 10% vacancy), but could stabilize further if absorption trends continue. Construction activity remains elevated, with 13.8 million square feet currently underway, down 7.9% from the previous quarter and 17.9% from a year ago. Rental rates decreased to $9.11, down 7.6% quarterly and 6.5% annually, amid the slight decline in vacancy. The Atlanta industrial market is showing signs of stabilization after years of robust leasing and construction. Decreased deliveries should help with future demand balance, but only if developers constrain speculative development in the near term.
SUPPLY & DEMAND
KEY MARKET INDICATORS
MARKET OVERVIEW
ATLANTA ECONOMIC UPDATE
The unemployment rate for the Atlanta metro area stood at 3.7% in July 2025, remaining well below the national average of 4.6%, according to the U.S. Bureau of Labor Statistics (BLS) Local Area Unemployment Statistics. Total nonfarm employment in the Atlanta area reached 3.124 million jobs in July 2025, reflecting a 0.7% increase from July 2024, as reported by the BLS Current Employment Statistics.
Job growth accelerated modestly, with 21,200 jobs added over the past year, showing gains in key sectors such as education and health services, financial activities, and leisure and hospitality. Counties including Cobb (3.5% unemployment), DeKalb (3.6%), Fulton (3.9%), and Gwinnett (3.4%) continue to anchor this economic vitality through competitive wages—averaging $1,533 weekly, surpassing the U.S. figure of $1,507—and consistent employment expansion. Looking ahead, Atlanta’s advantages in cost of living and business operations relative to coastal hubs sustain its status as a magnet for companies and talent.
LEASING ACTIVITY UP OVER 18%
Quarterly leasing velocity—comprised of new leases and renewals—stood at 8.2 million sq. ft., an increase of 18.1% from Q2 2025 but down 38.6% from last year’s level. Notable recent leasing activity includes Brava Tile signed a new 300,000 sq. ft. lease at the Greenwood Industrial Park, DHL signed a 209,192 sq. ft. sublease at the Shannon 85 Distribution Center and Shorr Packaging signed a new lease for 207,684 sq. ft. at the Buffington Business Center.
NET ABSORPTION MOVED BACK INTO POSITIVE TERRITORY FOR THE QUARTER
Net absorption—move-ins minus move-outs—improved significantly, recording 1,666,535 sq. ft. in Q3 2025, compared to -2,285,086 sq. ft. in Q2 2025 and 3,394,667 sq. ft. in Q3 2024. Demand in the last several quarters has trended unevenly, with most demand for space concentrated in more traditional Warehouse/Distribution space. Flex and Manufacturing properties remained flat or negative for the quarter. Notable move-ins in early 2025 include US E-Logistics moving into 633,269 sq. ft. at West Fulton Commerce Park, Elogistek moving into 494,804 sq. ft. at the Downtown Buford Logistics Center, and CJ Logistics, a global supply chain company and subsidiary of South Korea’s CJ Group, expanded its U.S. footprint by leasing 197,386 sq. ft. at the Southlake Distribution Center.
VACANCY RATE DECREASED TO 8.7%
The overall vacancy rate in Atlanta’s industrial market decreased from 8.9% in Q2 2025 to 8.7% in Q3 2025. Like most major industrial markets across the country, a robust pipeline of new construction over the past two years has moved the overall market from a landlord market to more neutral conditions (8% to 10% vacancy). Year-over-year, the vacancy rate increased 170 basis points from 7.0%. Flex, Manufacturing, and Warehouse/Distribution spaces have vacancy rates of 6.1%, 3.9%, and 9.4%, respectively. As demand outpaced new deliveries, the overall vacancy rate is forecasted to stabilize over the next few quarters.
INVESTMENT SALES TRENDS
Over the past year, 831 industrial and flex properties were sold in the Atlanta market, with prices averaging $122 per sq. ft. and cap rates averaging 6.5%. Notable sales transactions in the third quarter include North Haven Net REIT acquired the 1,512,552 sq. ft. distribution building at 1871 Willow Springs Church Rd from a Link Logistics/WPT Capital Advisors JV for $75 million in an all-cash deal (6.1% cap rate). Also, Georgia Power Company acquired the 825,000 SF distribution center at 750 Logistics Pkwy from a JV between Waterloo Partners, Sweid & Seid, and ICM Asset Management for $94,750,000 or $115 per sq. ft.
RENTAL RATES DECREASE AMID STABILIZING VACANCY
Overall asking rental rates for triple net (NNN) leases decreased to $9.11 per square foot in Q3 2025, down 7.6% from $9.86 in Q2 2025 and 6.5% from $9.74 in Q3 2024. Amid stabilizing vacancies, rental rates have moderated, influenced by balanced demand in certain submarkets and adjustments in new construction costs.
For More Information, Contact:
Steve Triolet
SVP of Research and Market Forecasting
tel 214 223 4008
[email protected]
