The June industrial report<\/a> from CommercialCafe highlights a persistent decline in the under-construction pipeline with fewer new projects starting than at any time in the last decade. Specifically, since the beginning of the year, 177.8 million square feet of industrial space has been completed, while new construction has begun on only 69.2 million square feet. As of May, 381.3 million square feet of industrial space was under construction nationwide, representing 1.9% of the total inventory.<\/p>\n Phoenix continues to lead in industrial development with 38.7 million square feet of industrial space under construction. This represents the largest pipeline relative to its current stock at 9.8%. However, it\u2019s also almost 34% less than the same time last year, when 58.4 million square feet was under construction. Notably, data centers in the metro have been booming with firms like Meta and Google building facilities. These developments have also attracted manufacturers to the market, the most notable being TSMC\u2019s massive, 3.8-million-square-foot semiconductor fabrication plant.<\/p>\n Earlier this year, the March CommercialCafe report highlighted that Phoenix\u2019s rise could be attributed to it becoming increasingly popular as a destination for data centers. To that end, developers have extended their reach from the traditional data center hubs, such as northern Virginia in the Washington, D.C. market (home to the largest data center market in the U.S.), where power capacity concerns limit further development. Still, Phoenix has its own challenges: While water is currently sufficient for powering and cooling data centers, local policymakers recognize the need to manage water resources to avoid future shortages.<\/p>\n Beyond Western markets like Phoenix, secondary markets, such as Atlanta, are also experiencing a significant boost in data center development. As of the March report, Atlanta had 3 million square feet of data center space under construction with the metro following a path similar to Phoenix as it diversifies with new growth in data centers alongside expanding manufacturing developments.<\/p>\n Currently, more than 2 million square feet of manufacturing space is under construction in the Atlanta market. Notable projects include PepsiCo\u2019s 260,000-square-foot expansion in Stone Mountain and the Intuitive Surgical Regional Headquarters \u2014 a 750,000-square-foot facility for robotic surgical equipment.<\/p>\n Of course, along with Pepsi Co, Atlanta\u2019s manufacturing upside has long been recognized by other major companies, such as Coca-Cola, Mercedes-Benz, The Home Depot and Delta, all of which either call the metro area home or have established operations there. Additionally, Atlanta\u2019s central location in the Southeast \u2014 with its extensive highway network, growing population and thriving ports \u2014 make it an ideal industrial hub. Moreover, our recent manufacturing ranking<\/a> of U.S. metros revealed that Atlanta boasts one of the more affordable manufacturing workforces among the top industrial markets.<\/p>\n In total, the approximately 10.1 million square feet of industrial space under construction in Atlanta \u2014 the fifth-largest pipeline in the nation \u2014 highlights a deviation from the national trend. And, despite broader industry slowdowns, the Atlanta industrial market has seen a modest increase in development in the last year.<\/p>\n\nPhoenix: Leading the Pack<\/h2>\n
Atlanta: Defying National Trend<\/h2>\n