A developer is pursuing plans to build a large industrial park in a scenic part of metro Atlanta.
Trammell Crow Co. filed state paperwork last week for an $80 million warehouse project near Lake Lanier in Buford. The Dallas, Texas-based developer plans to replace a wooded lot at the corner of Big Creek Road and Lanier Islands Parkway with six warehouses, which total nearly 747,000 square feet.
The project, while in its early phases, comes at a transition point for metro Atlanta’s incredibly hot industrial market, which has experienced years of unprecedented growth.
The COVID-19 pandemic and its supply chain disruptions spurred a deluge of warehouse construction, with Atlanta breaking records for its amount of new supply during 2023, according to real estate services firm CBRE. Other building types, especially office, have struggled to regain demand following the pandemic, but developers could not build warehouses fast enough.
But the construction pipeline is beginning to slow as millions of square feet of industrial space becomes available. CBRE analysts say it’s a much-needed slowdown for a market that was overheated.
“On the heels of two consecutive years of its highest demand for space ever, Atlanta’s industrial market ends 2023 more down-to-earth and in tune with macro-economic conditions,” CBRE’s year-end 2023 industrial report said.
Trammell Crow, which has multiple developments across Georgia, declined to comment about its Lake Lanier project, which it calls Buford Creek Business Center. The project’s details were first revealed Feb. 6 in a Development of Regional Impact filing, which was first reported by real estate publication Bisnow.
DRIs are required for gigantic projects that will affect more than just the city or county where the project is located. The filing was made to the Atlanta Regional Commission, which will vet the application and analyze how local infrastructure will be affected.
The property, which is owned by Heritage South Partners LP, will need to be rezoned. It’s located within the Hall County portion of the city of Buford. The project is expected to be complete by March 2026. according to the DRI.
Blaine Kelley, executive vice president of CBRE’s Global Supply Chain Practice in Atlanta, told The Atlanta Journal-Constitution in October that Atlanta’s industrial market has been flip-flopping between too little inventory and too much, which he called a “yo-yo effect.” That was on full display during the back half of last year, where a record-setting 24 million square feet of new industrial space opened.
The wave on new space has pushed vacancy rates up, which Kelley said would result in a healthier overall market. Vacancy rates nearly fell to 3% in late 2021 and early 2022, but they climbed to 7.7% by the end of 2023.
The number of new industrial projects has also decreased in response to lessening demand. Atlanta ended last year with 20.2 million square feet of warehouse space under construction, nearly a 55% decrease from the year prior.
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