Beaulieu: Sign of Deals to Come
The Belgium-based flooring maker just filed plans with regional planners to develop a 545k SF manufacturing facility by 2015 in Cartersville (let's all celebrate with some frites and mayonnaise), one of the many giant deals that have Atlanta's industrial market popping again. That's why we're thrilled to host our 5th annual Atlanta Industrial Real Estate Summit next week. And even more companies are sniffing around the market.
“There's definitely a lot of big users out there,” says DCT Industrial's Lisa Ward. Lisa—one of the most successful industrial leasing vets in our industry and a panelist at our event—recently switched over from IDI Gazeley. Among those big deals include the Under Armour distribution center, which is eyeing Atlanta, Nashville, and other cities for a requirement that may surpass 1M SF. Other deals have code names: hush-hush ways companies can scout sites without revealing identities.
Lisa's most recent deal was secured while still with IDI—she helped ResMed lease 475k SF at Riverside Business Center. And unlike deals in the past few years that have largely been musical chairs between buildings, this is a company new to Georgia that will add jobs to the local economy.
Colliers International paints the picture best: Its mid-year report on Atlanta industrial shows year-to-date absorption at 8.3M SF. Colliers' Scott Amoson says it's pretty easy to see how we'll shoot well over the 10M SF mark by year's end. Still, he says there's a sense of hesitation, as if the good times may be too good to be true. That's being seen in hesitancy from developers to strike out on spec—a trend that is finally changing. Scott points out that there are more than 3M SF in the pipeline (above), perhaps up to 8M SF in all.
“We've just come off five difficult years, so I think everyone is still very cautious,” says Trammell Crow's Mark DiShaw, who'll also be speaking (he's seen above at another Bisnow event with Pattillo Industrial Real Estate's Larry Callahan). But he says developers shouldn't be so worried. Even if we hit 8M SF spec, there will be more than 10M SF in absorption. Trammell Crow is one of the first to go spec this cycle with a 320k SF in Fairburn, launching this October. Mark says prospect activity today is much broader instead of focused on the housing market. “That's positive for Atlanta. Personally, I would like to think that will help us sustain and grow… and not flame out.”
Oakmont Industrial Group's Thomas Cobb demonstrates how developers ought to take the plunge in the Atlanta market (he'll be parachuting into our event as well). “Large deals seem to be what's leading the charge in the initial development activity cycle,” he says, both in Atlanta and around the country. Colliers' report notes that absorption last year was centered on deals ranging from 100k to 300k SF, largely due to a lack of available bigger blocks of space. It's that setting that will have Oakmont going spec this year on 38 acres off I-20 W and Riverside Dr with a 600k SF distribution center, Tom says.
