Article Source: Atlanta Business Chronicle, Biz Journals
While uncertainty continues about demand for office space in the Covid-19 world, developers of Atlanta’s industrial real estate projects seem bullish about their future.
Keep on building.
Majestic Realty Co. is the latest developer to announce a new project, a 1.15 million-square-foot speculative building in Union City near Hartsfield-Jackson Atlanta International Airport, the world’s busiest. Majestic adds to the more than 21 million square feet of industrial real estate projects under construction in Atlanta, the fifth consecutive quarter activity has remained at that level, according to Colliers International.
Amazon and Walmart are driving much of the new occupancy, Colliers said.
Amazon alone leased 3.7 million square feet in the past three months. Amazon’s new leases bring its total fulfillment center network to at least 13 million square feet across the Atlanta region, almost doubling its size from the end of last year.
Majestic was a beneficiary of that rapid expansion. Amazon leased at least 500,000 square feet at Majestic’s Airport Center IV project, according to market intelligence. The firm did not release the name of the company behind the new lease at “MAC IV.”
Amazon is building-out the infrastructure of its same-day delivery network, with fast-growing population centers such as Atlanta and cities in Texas and Florida seeing most of the new activity.
Walmart may also explore ground-up development in Atlanta, sources familiar with the market said. For now, it’s ramping up its own real estate expansion in north Georgia. It recently leased just over 1 million square feet at Valentine 85 Logistics, a project owned by Hillwood Development Co. near Pendergrass, Ga. The project is about 45 minutes northeast of downtown Atlanta.
Georgia’s construction boom for new warehouses is a microcosm of bigger trends across the country.
“In the Covid-19 era, e-commerce is fueling industrial demand more than ever,” according to real estate giant CBRE.
As e-commerce accounts for a larger share of overall retail sales and same-day delivery networks continue to expand, the activity should provide a short-term buffer to a more severe economic downturn. Across the Atlanta metro region, other companies such as Facebook, Boeing Co. and Mondelez Global are also moving into new warehouse and data center operations.
In Union City, Majestic says its new spec building will be called MAC V and should be finished by June 2021. It’s the fifth phase of Majestic’s 12 million-square-foot portfolio in the I-85 South corridor.
Stan Conway, executive vice president of Majestic Realty, said, ““By moving forward with this speculative project, we are reinforcing our commitment to the submarket despite current uncertainties in the economy.”