Demand for industrial space has reached record levels, and developers are moving fast to keep up with demand.
In a recent report, “The Race for Industrial Space,” JLL notes that “given the heightened demand experienced in 2020 and 2021 and the velocity at which it is going forward, we are starting to see the first wave of a supply crunch.”
Ackerman & Co. is one of those developers jumping in to meet the need for Class A industrial space, and the firm is making sure to offer design features that are highly sought after by today’s modern distribution operations.
“Companies in industries such as e-commerce, 3PL and logistics and distribution companies are leading the way with… utilization of modern facilities to attract labor as well as move goods in and out,” the JLL report states. Particular features today’s distributors are seeking include high ceiling heights, plenty of auto and truck parking, and convenient access to major interstate corridors.
Providing the most efficient space
New projects Ackerman & Co. is currently developing new projects from Georgia to Texas that offer the key advantages today’s distributors seek.
In metro Atlanta in the I-85 North corridor, Ackerman & Co. is developing Braselton Crossroads, a Class A master-planned park that will feature three distribution buildings totaling 470,000 square feet – two 160,000-square-foot buildings and a 150,00-square-foot building. Now under construction, the facilities will feature 30 to 32 feet clear heights and rear-road configurations. A crucial benefit is the direct access to Interstate 85 less one-half mile from the project, and the buildings will offer abundant parking.
Also in the Atlanta market in the I-20 East distribution corridor, Ackerman & Co. is developing facilities of 168,480-square feet and 50,000 square feet. The site, part of the Ackerman-developed Rockdale Technology Center development in Conyers, GA, offers high visibility along the Interstate and convenient access to the nearby full-diamond interchange, only one mile away. It also will feature the crucial high ceilings (30 feet).
The features that Ackerman & Co. is incorporating at its projects are important for e-commerce, logistics and other industrial space users looking for space with the most efficient designs and strategic locations to reach customers quicker than ever before.
As Ackerman continues to heighten its presence in strategic logistics markets, it is expanding in Texas. The firm has begun construction on Doerr Lane Logistics Center, a 307,000-square-foot, Class A distribution center positioned between San Antonio and Austin in an area known as the Texas Triangle, the fastest-growing region in Texas.
The state-of-the-art facility will feature 32-foot clear heights, extensive auto and trailer parking and quick access to I-35, Loop 1604 and I-10.
In another Texas project in the same submarket, Ackerman is planning more than 500,000-square-feet of distribution space with 32-foot clear heights at a site providing great access to the I-35 access road, only ½ mile away.
“We’re seeing strong interest for our available space from users ranging from retailers, food distributors and medical supply companies to e-commerce operations and manufacturers,” said Brett Buckner, Senior Vice President of Ackerman & Co.’s Industrial Services Group, who is leading the leasing efforts at Ackerman’s Georgia industrial properties along with Vice President Chris Miller.
Industrial market outlook remains strong
As Ackerman & Co. moves forward with these projects – with more planned developments coming up in Texas, Alabama and its core market of metro Atlanta – developers nationwide are also ramping up their development pipelines.
There is certainly good reason to pursue development given the ongoing robust demand. Atlanta set a record for annual absorption in 2021, registering more than 39 million square feet of positive net absorption for the year, according to CoStar. Nationwide, vacancy rates have hit a record low of 4.0 percent.
Although there is a significant uptick in the construction pipeline – to a record of 816 million square feet nationwide – the additional inventory is not expected to tilt the market unfavorably, CoStar states. However, the rise in inflation has the potential to “erode consumers’ purchasing power and dent the current boom in consumer goods spending and industrial leasing.”
Still, the outlook for industrial demand remains positive for developers.
“National rents are poised to continue growing well ahead of inflation over the next several months given the current near-record low level of vacancy,” CoStar reports.