Future Cities
Savannah
2024 North America Industrial Big-Box Review & Outlook
April 29, 2024 5 Minute Read
Demographics
While Savannah does not have a large nearby population, 25 million people or 10 million households live within 250 miles of the market’s core, with a 2.9% projected five-year growth rate.
Figure 1: Savannah Population Analysis
The local warehouse labor force of 12,308 is expected to grow by 10% by 2034, according to CBRE Labor Analytics. The average wage for a non-supervisory warehouse worker is $17.70 per hour, on par with the national average.
Figure 2: Savannah Warehouse & Storage Labor Fundamentals
* Median wage (1 year experience); non-supervisory warehouse material handlers.
Location Incentives
Over the past five years, there have been over 15 economic incentives deals for an average of $6,400 per new job in metro Savannah, according to fDi Intelligence.
CBRE’s Location Incentives Group reports that top incentive programs in metro Savannah include the Regional Economic Business Assistance (REBA) program. REBA is considered a “deal-closing” grant because it incentivizes construction in Georgia. Funds may be applied to any fixed-asset costs, including infrastructure, construction, real estate and personal property.
Another program available in Savannah is the Job Tax Credit, which awards businesses for creating net new full-time jobs. These credits can be applied toward a company’s corporate income tax liability or reduce the company’s payroll withholding requirements. To qualify, companies must have local headquarters or R&D operations in one of the following industries: manufacturing, warehousing/distribution/logistics, software development, contact centers, data centers, telecommunications or financial technology.
Figure 3: Savannah Top Incentive Programs
Note: The extent, if any, of state and local incentive offerings depends on location and scope of the operation.
Logistics Driver
The Port of Savannah is the primary demand-driver in the region. Savannah is the fourth-largest port in the U.S., with the largest single terminal. Many improvements and strong labor dynamics make it the East Coast’s fastest-growing port. It also provides direct access to I-26 (East/West) and I-95 (North/South). Key cities and growing manufacturing points along the coast can be reached within a one-to-two-day drive.
Savannah is the fourth-largest port in the U.S., with the largest single terminal. Many improvements and strong labor dynamics make it the East Coast’s fastest-growing port.
Supply & Demand
In 2023, over 20 million sq. ft. of completed construction significantly expanded the Savannah big-box market to nearly 100 million sq. ft. This surge in completions significantly increased vacancy rates from a record low 0.9% in 2022 to 8.7% in 2023. Despite this vacancy rate increase, Savannah was North America’s top big-box growth (net absorption/existing inventory) market, with a record 13 million sq. ft. of net absorption. Leasing activity was strong in 2023, with just under 13 million sq. ft. transacted, the second consecutive year leasing surpassed 10 million sq. ft. 3PLs and general retailers & wholesalers dominated leasing, collectively accounting for 80% of transaction volume.
Slightly less than 13 million sq. ft. was under construction by the end of 2023. Although this represents a nearly 50% year-over-year decrease in space under construction, it will continue to affect vacancy rates, albeit not at the 2022 rate. In 2024, expect a diverse tenant set to expand into Savannah to utilize its ports. More companies intend to diversify their source of imports in the coming quarters.
Figure 4: Share of 2023 Leasing by Occupier Type
Source: CBRE Research.
Figure 5: Lease Transaction Volume by Size Range
Source: CBRE Research.
Figure 6: 2023 Construction Completions vs. Overall Net Absorption by Size Range
Figure 7: Direct Vacancy Rate by Size Range
Figure 8: Under Construction & Percentage Preleased
Figure 9: First Year Taking Rents (psf/yr)
Source: CBRE Research.
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Industrial & Logistics Research
John Morris
President, Americas Industrial & Logistics, Advisory Services
