Vacancy continues to climb amid prospects of an economic soft landing

Atlanta's industrial market saw further softening in the third quarter of 2024, with the vacancy rate rising to 9.4%, up 330 basis points (bps) year over year, largely due to new supply outpacing demand. Despite higher vacancy, asking rents ticked up by 1.0% in Q3, reaching $6.95 per square foot (psf), reflecting construction costs and more premium space available. As the market adjusts to economic challenges and moves towards pre- pandemic norms, vacancy rates are expected to rise throughout 2024. However, recent interest rate cuts by the Federal Reserve could stimulate investment and demand by making borrowing cheaper, potentially stabilizing vacancy rates if demand catches up with supply. However, Atlanta is expected to remain a key industrial hub for the foreseeable future.

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