Atlanta’s recovering industrial sector was the focus of a panel featuring Hartman Simons partner Summey Orr yesterday at the RealShare Atlanta commercial real estate conference at the Georgia Aquarium.
Other panelists included Joe McGorrey of Trammell Crow Co., Gus Milano of Hartz Mountain Industries, John Petrino of the Georgia Ports Authority and Corey Richardson of First Industrial Trust. Al Pontius of Marcus & Millichap was the moderator. For today’s Four on Friday, we highlight four points made during yesterday’s discussion.
• It’s early. Atlanta’s industrial real estate is enjoying a strong bounce-back — and the good news is that it should continue for a while. “We are in the second or third inning,” Richardson said. He noted that firms tied to the single-family housing market are a big source of tenant demand.
• A strong core. The recession drove many players out of the Atlanta industrial development market, and so today’s wave of new projects is being led by “a handful of core industrial developers” who waited out the tough times and “have come out really strong,” Orr said. Their patience has rewarded them with “a lot of opportunities that they might not have had five years ago.”
• Fresh memories. The specter of the recent recession is one factor that could put something of a brake on new industrial development, Orr said. When asked about possible obstacles to the sector’s ongoing growth in Atlanta, he replied, “The overall impediment is the freshness of the last recession and the fear of the next one.”
• The old-timers are hanging in there. Even though demand for new facilities with such cutting-edge features as 36-foot clear heights is strong, plenty of tenants still want space in older industrial properties, McGorrey noted.
When an occupier moves from an older space to a new development, the likelihood is “very high” that the vacated space will be leased, according to McGorrey.