(From left to right: Chris Brown, Larry Callahan, Greg Herren and Hartman Simon's Summey Orr at Bisnow's Atlanta Industrial Real Estate Summit earlier this week.)
Earlier this week, Hartman Simons Managing Partner Summey
Orr moderated one of the two panel discussions at Bisnow’s 4th
Annual Atlanta Industrial Real Estate Summit, which provided a detailed
look at the metro area’s improving industrial market.
Orr’s panel was focused on development and included Chris
Brown, senior vice president at Duke Realty; Larry Callahan, CEO of Pattillo
Industrial Real Estate; and Greg Herren, chief operating officer at Seefried
Industrial Properties.
Chuck Warbington, executive director of the Gwinnett Village
Community Improvement District, also moderated a panel focused on leasing.
Participants included Rodney Davidson, vice president at Jones Lang LaSalle;
Kent Mason, vice president at Prologis; Corey Richardson, regional director at
First Industrial Realty Trust; and Lisa Ward, vice president at IDI.
In
today’s Four on Friday, we highlight four of the points made during the summit.
• Manufacturing Is Returning.
The industrial sector in both Atlanta and across the nation will benefit from
the return of manufacturing in the coming years, Callahan said.
Whereas product manufacturers were once anxious to open
plants in China because of the low labor costs, they are growing more concerned
about air-quality and intellectual-property issues in the country, according to
Callahan. Cheap energy and the desire for closer access to the U.S.’s growing
population are luring more and more manufacturers back to the States, he added.
“It’s not a tidal wave yet, but there will be a substantial
amount of manufacturing” coming back to the U.S., Callahan said.
• Spec Development Is
a Year Away. For spec industrial development to begin in earnest, metro
Atlanta’s vacancy rate needs to dip to 10.5 percent, Herren said. The rate is now
11.9 percent.
At the current pace of absorption, it will be “about a year”
until the rate hits the magic mark, Herren predicted.
• The Northeast
Corridor Is Hopping. Panelists consistently pinpointed the metro area’s
Northeast corridor as the submarket experiencing the most foot traffic from
potential tenants.
Submarkets that have really struggled in recent years – such
as the areas near I-20 West and Fulton Industrial Boulevard – are starting to
see more leasing activity as well, Mason said.
“We still have a lot of work to do to get [Prologis’ metro
Atlanta portfolio] above 90 percent [occupancy], but everything’s trending in
the right direction,” Mason said.
• Keep an Eye on
Savannah. The Savannah industrial market could become a real force in the
coming years, as more product companies open distribution centers there to be
closer to Florida’s large population, Ward said.
“Forty percent of the Southeast [population] is in Florida,
and access to that is key,” Ward said. “That’s where Savannah is going to come
into play.”
According to Mason, Savannah’s emergence already has begun.
“Savannah is a real bright spot,” he said. “It went from, really, a dead zone
to a place of significant activity.”
On a closing note,
from all of us here at Hartman Simons: have a happy and safe Labor Day weekend.