Insurance giant MetLife and a California development firm said Wednesday they plan to build a massive distribution complex in Henry County, putting a $110 million bet on the state’s recovering industrial and logistics markets.
New York-based MetLife and its partner, Panattoni Development Co., plan to develop a 183-acre site near McDonough to be named Lambert Farms Distribution Center. The project along Ga. 42 and U.S. 23 at King Mill Road is about 20 miles southeast of Hartsfield-Jackson International Airport.
The planned industrial park is the latest in a string of high-profile projects to be announced for the region’s Southside, including a Kroger distribution center at Fort Gillem and the new North American headquarters of Porsche at the former Ford plant. The McDonough project is among the largest local industrial developments in several years to be built without tenants.
“Atlanta’s market has been struggling, but it is rebounding,” said Chuck Davis, regional director for MetLife Real Estate Investors.
The partners envision a site with about 3 million square feet of space or about the size of two large shopping malls.
Industrial vacancies grew through the recession, but corporate expansions and improvements in consumer spending have started to fill those empty centers.
Metro Atlanta’s glut of empty distribution and industrial space peaked in 2010 at more than 92 million square feet, or about 45 Perimeter Malls, according to data firm CoStar Group. That figure has dropped by about a third and sits near pre-recession levels.
The current vacancy rate is 10.8 percent, down from a peak of 15 percent in 2010, according to according to data from CB Richard Ellis Research.
The metro Atlanta warehousing market is driven in large part by consumer product companies, grocers, e-commerce companies and other large brick and mortar retailers, said Todd Barton, first vice president of industrial properties at CB Richard Ellis in Atlanta. Those companies are seeking to make their supply chains more efficient to move products faster to retailers and consumers.
“When you have a large industrial base and an economy that finally is recovering and eventually expanding, you have the organic growth of the (distributors) already here and new users coming to market,” Barton said.
Warehousing jobs in Georgia dipped slightly to 26,700 in May compared to the same month a year ago, according to data from the state Department of Labor.
MetLife and Panattoni have plans to develop eight new industrial facilities in four states, according to the release. One could be in northeast metro Atlanta.
Roger Tutterow, a Mercer University economist, said logistics and manufacturing are in the wheelhouse of the Southside of metro Atlanta. The I-75 corridor is a natural link to the world’s busiest airport and the booming ports on Georgia’s coast.
But he cautioned that speculative development can be risky, and that industrial development nationwide is seeing a resurgence since the recession.
“It sounds like a very ambitious project in terms of the size,” Tutterow said.
Davis, the MetLife executive, said his team has had discussions with potential tenants. Construction is expected to take about three years.
The project will likely compete with other new industrial projects on the drawing board, including additional development planned at Fort Gillem, and a project by Majestic Realty near Fulton County Airport.
“Atlanta is a core spot and I don’t see that changing,” Davis said.