Article by Atlanta Business Chronicle’s Contributing Writer, Tonya Layman.
Transcript of Tonya Layman’s Atlanta Business Chronicle’s article:
Atlanta’s southside has a long history as a hub for logistics companies, and with a number of efforts underway to put more warehousing and e-commerce operations in place there, it has the potential to be one of the Southeast’s largest logistics centers.
One of the biggest efforts to promote more logistics operations along the south side is through the reuse and redevelopment of 1,168 acres at the former Fort Gillem Army Base into the Gillem Logistics Center. This center will accommodate more than 8 million square feet of industrial space and half a million square feet of mixed-use buildings in Forest Park.
In June, a $30 million deal was struck between the Urban Redevelopment Agency(URA) of the city of Forest Park and the U.S. Army for the creation of the Gillem Logistics Center.
Its location in Forest Park provides access to major rail lines and close proximity to interstates 285, 75, 85 and 675, while sitting just 4.5 miles away from Hartsfield-Jackson Atlanta International Airport and only 12 miles from downtown Atlanta.
Already, Cincinnati-based grocer The Kroger Co. has closed on a 253-acre parcel for a 1.2 million-square-foot to 1.6 million-square-foot distribution center that will bring 750 jobs to the area – 120 of which will be new positions.
“They are working on their center as we speak,” said Fred Bryant, URA executive director, adding he expects more announcements of other big name retailers ready to set up distribution and e-commerce centers there within the year.
“We have had conversations with a number of companies but we were not able to deliver what they needed when they needed it because we had not finalized the deal with the Army, but we know many of those companies are still interested,” Bryant said.
As the team there gets its marketing efforts up and running, Bryant said there are some opportunities on the site for businesses to move into the existing business park and a 100,000-square-foot office building with just some minor renovations.
“Atlanta — especially the southside — may be the best industrial real estate deal in the country when you consider rates, logistics and operating costs. The cost of doing business is low, and as the hub of the Southeast, Atlanta’s location is unmatched, making the city attractive for the industrial business now and in the future as we are poised for more growth,” said Todd Barton, first vice president at CBRE Inc.
He believes access is the key for continued growth along Atlanta’s southside.
“Atlanta has three major interstates, all of which are easily accessible, and infrastructure continues to improve,” Barton said. “On the southside, you’ve got interstates 75 and 85, the world’s busiest airport and the CSX Intermodal facility. Atlanta’s southside also provides strategic proximity to the Port of Savannah and a shorter travel distance for distributors serving Florida. Regional distribution remains a key component to Atlanta’s industrial focus, specifically south of the city proper. As new spec buildings rise to accommodate the population of Atlanta and job growth, the hub continues to strengthen.”
Barton said Atlanta’s industrial sector has made room for a proliferating e-commerce field, keeping up with the trend of online sales and consumer needs.
“Net absorption of space remains strong, with more than 7.6 million square feet through the first half of 2014,” he said. “This net absorption, combined with the limited delivery of new product, has caused the vacancy rate to drop to 10.8 percent. Spec product will be underway shortly, however, with several projects recently kicking off and more in the planning stages.”
Along the I-85 south corridor, Exeter Property Group recently delivered a 353,400-square-foot building in Fairburn, and Majestic Realty Co. is close to completing a 560,625-square-foot building in Union City. Trammell Crow recently closed on a 29-acre site in Fairburn and will be underway soon with a 317,520-square-foot bulk warehouse. In Henry County, Panattoni Development Co. recently acquired 183 acres with plans for a bulk warehouse park with total build-out of almost 3 million square feet.
Page Siplon, executive director for the Georgia Center of Innovation for Logistics, said with population growth being one of the main drivers for logistics and supply chain growth, it makes sense that business is booming along Atlanta’s southside.
“During the recession a number of industries got punched harder in Atlanta than in other areas. We see many of those coming back and the same is true for logistics. We see logistics following that curve if not actually leading that curve of recovery,” Siplon said. “If we look at the industry broadly, we see some projections that put us over where our pre-recession levels were. That is encouraging to places like the south metro area, which has all the elements needed for full supply chain, including multiple highway systems, rail yards, great access to air cargo as well as passenger air facilities with the world’s busiest airport. Add to that the proximity to our seaports and you have completeness in all the elements and that sets south metro apart from the pack.”
But Siplon said while the future looks bright, there needs be a greater focus statewide on logistics workforce education.
“Across Georgia, there are over 100 logistics education offerings so we have more than just about anyone else in the Southeast, but as the industry grows we will need a larger trained workforce and we aren’t just talking truck drivers or people to work in the warehouse — we will need those, too — but we are talking about people trained in management software systems and inventory control processes,” he said. “So while we are doing a lot of education, we need to continue to do that and even double down on those efforts.”
Miguel Southwell, the airport’s general manager, believes there is a major opportunity at the airport to boost its cold chain logistics presence and make the airport a more viable part of the city’s economic development growth.
“Historically we have attracted logistics businesses whether it is warehousing, freight forwarders or customs brokers and we will continue to see that growth in Atlanta, specifically along that southern crescent,” he said, adding what has been absent is a significant amount of class A office space.
Because of this airport leaders are working with elected officials and business associations in the area to research the creation of an “airport city” concept that may include a world-class hotel, class A office space, a vehicle plaza and other services that will serve both employees and passengers, all while complementing the logistics work being done at the airport, Southwell said.
This work goes hand-in-hand with the airport’s efforts to increase cold chain logistics there. The airport recently opened a new USDA Atlanta Plant Inspection Station, a 17,000-square-foot facility built to inspect plants, animals and perishables at Hartsfield-Jackson.
“We are moving as an airport to play a greater role in the perishable industry as well as a greater role in being a major logistics center in air cargo overall,” Southwell said, adding the perishable goods sector over the last two to three years has grown by 5 percent to 6 percent, equating to robust growth that could mean more jobs for Atlanta.
“We see a significant opportunity to grow in the perishable industry segment,” he said. “At the end of the day when we talk about logistics or cold chain, it is really about the single more important purpose of an airport and that is to be an economic engine or tool to increase jobs and actively participate in the war for jobs. As we increase our air cargo presence in Atlanta, we will create a significant amount of jobs.”