Megawarehouses are in style in a big way – nowhere more so than in Georgia, according to a new report from CBRE. Between Atlanta and Savannah, Georgia tallied 19 of the largest warehouse leases signed in the U.S. during the first half of 2022. Atlanta led all markets with 12 leases totaling 10.3 million sq. ft.  

Nationally, warehouse users signed leases for 37 facilities of 1 million sq. ft. or larger in the U.S. in the first half of this year, up from 24 in the first half of 2021. Nine of these seven-digit leases - five in Atlanta and four in Savannah -- were signed in Georgia alone. Georgia’s three largest warehouse leases signed so far this year were executed in the Savannah market. 

“As activity at the Port of Savannah has increased, so has demand for large warehouses in our market,” said William Lattimore, Senior Vice President at CBRE in Savannah. “With over 23 million sq. ft. under construction, Savannah will continue to be able to meet large tenant requirements for the foreseeable future.” 

CBRE’s recent analysis compared the 100 largest industrial & logistics leases clinched in this year’s first half. Overall, the average size of the 100 largest leases edged close to seven digits -- 931,860 sq. ft., up from 800,149 a year ago.

The activity points to expansion in the industry, particularly for traditional retailers and wholesalers. Eighty-five of the top 100 leases are new leases rather than renewals. Traditional retailers and wholesalers accounted for the largest share – 40 leases. Runner up: Third-party logistics firms at 30 leases.

Only two of Georgia’s 19 mega deals were renewals and both were signed in metro Atlanta. Of the city’s 12 large leases, 10 were signed within the Airport/South Atlanta submarket. At over 198 million sq. ft. of inventory, it is the city’s largest industrial submarket, according to CBRE. General retail & wholesale users made up half of Atlanta’s largest leases signed during the first half of 2022. Third-party logistics firms signed three of the city’s largest leases.

“The Atlanta market has benefitted from a growing population, low barriers to entry, good infrastructure, and a business-friendly environment,” said Stuart Pendley, First Vice President at CBRE in Atlanta. “All of this combined has created a healthy environment for developers to build speculative projects and large users to continue to lease space. With the strength we’re seeing from Savannah’s port and Georgia’s continued attractiveness to companies, we don’t expect to see demand for large warehouses subside anytime soon.”

All but one of Savannah’s largest leases came courtesy of a third-party logistics user or a general retail & wholesale user. Both occupier types saw two 1 million sq. ft. leases each signed during the first half of the year. As of the second quarter, Savannah’s vacancy rate was 0.7 percent with 3.1 million sq. ft. of net absorption.

“The industrial & logistics market preformed solidly in the first half of the year despite headwinds challenging the broader economy,” said John Morris, CBRE’s President of Industrial & Logistics in the Americas. “We have seen a falloff in leasing by smaller users – those in 25,000 sq. ft. of less – likely due to the economic environment. But the largest users are forging ahead, picking up most of the slack.”

Leading Markets For Top-100 Industrial Leases in First Half 2022

To read the full report, click here.