The Southeast’s industrial real estate sector is navigating a period of adjustment in 2024. Shifts in leasing patterns and rising vacancy rates reflect broader economic challenges, yet pockets of opportunity remain, particularly in strategic tertiary markets. The Hollingsworth Companies, as the largest developer of industrial space in tertiary markets in the Southeast, is adapting to these changing dynamics while focusing on high-potential areas.
In Mocksville, North Carolina, part of the Piedmont Triad MSA, we’re nearing completion on two industrial buildings in our SouthPoint Business Park. These facilities, spanning 130,492 and 152,241 square feet, feature modern amenities suited for light manufacturing or distribution tenants. Mocksville’s strategic location along I-40 offers easy access to major markets while providing a stable workforce and competitive operating costs. This development expands our park to twelve single-tenant buildings covering 1.3 million square feet, making it one of the largest semi-rural industrial parks in the Southern United States.
Our projects in Cookeville, Tennessee, are also making significant strides. Cookeville’s central position between Nashville and Knoxville, coupled with recent infrastructure investments, makes it attractive for industrial users seeking to optimize their supply chains. Our developments here cater to the growing trend of supply chain regionalization, as companies seek to establish operations in more cost-effective and business-friendly markets.
While the overall market faces headwinds, we’re seeing varied patterns across the Southeast. Some tertiary markets in Virginia, Alabama, and neighboring states are showing resilience, benefiting from their strategic locations, skilled workforces, and business-friendly environments. This regional diversity allows for pockets of growth even in a challenging landscape. Recent market data shows a notable uptick in national absorption compared to earlier this year, indicating continued demand for industrial space despite ongoing market challenges.
Looking ahead, we’re monitoring key industry forecasts and trends. New construction starts have been slowing significantly throughout 2024, and this slowdown is expected to continue through year-end. This pattern is likely to result in tighter market conditions in high-demand areas as we enter 2025. Sustainability and technology integration are gaining importance, with tenants prioritizing energy-efficient designs and smart building technologies. The Hollingsworth Companies is strategically positioned to adapt to these evolving needs across various industries.
Our portfolio, comprising over 125 tenants across 20 million square feet of industrial space, gives us a broad perspective on market dynamics. While acknowledging current challenges, we remain committed to creating value in these high-potential markets, positioning ourselves and our tenants for long-term success as the market eventually stabilizes and recovers.
