Atlanta's industrial market remains on solid footing, and the sector continues to show signs of strength despite the economic impact of the coronavirus pandemic. After a slowdown in leasing activity immediately following the onset of the pandemic in mid-March, leasing volume has surged over the past few quarters, particularly in the big-box distribution cohort. Developers have responded to the metro's continued strength, and after a slowdown in construction starts in the months after the pandemic hit, groundbreakings increased in the second half of 2020. Atlanta is home to one of the largest speculative supply pipelines in the nation, and submarkets in the southern part of the metro will bear the brunt of the current supply wave. However, even if the metro's spec pipeline continues to ramp up, vacancies should remain well below Atlanta's long-term historical average of nearly 10% over the next few quarters due to the uptick in leasing activity.
Sustained low vacancies have kept pricing power in the favor of landlords in recent years. Rent growth continues to outperform the national benchmark and has slowed only slightly since the onset of the coronavirus pandemic. The metro benefits from its role as a regional and national distribution hub, the growing Port of Savannah, and strong local demographic growth. While the Port of Savannah is a major driver for Atlanta industrial and a long-term net positive, any disruption in trade caused by the economic impact of the coronavirus pandemic could affect Atlanta industrial.