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2/28/23
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This report provided by CBRE
Demand for industrial & logistics warehousing space is driving an increase in mega-warehouses, according to a new CBRE report. The largest 100 industrial lease transactions in 2022 included an unprecedented 63 signings for 1 msf or more, up from 57 in 2021.
This was a key finding in CBRE’s analysis of the 100 largest industrial & logistics leases completed last year. Overall, the average size of the 100 top leases was 1.07 msf, compared to 2021’s previous record of 1.05 msf. Of those top 100 leases, the Inland Empire (IE) led the way with 17 leases, totaling 20.9 msf. The IE also set a record with 11 leases of 1 msf or more.
“The top leases in the Inland Empire illustrate the extraordinary demand for big-box warehouse space and further cement the IE’s standing as the premier industrial market,” said David Barnett, CBRE’s Director of Research and Thought Leadership for Greater Los Angeles, Orange County and Inland Empire. “As a result of this demand, rents increased 37% year-over-year and are up an astonishing 141% since Q4 2019.”
Accounting for 53 of the top 100 leases, traditional retailers/wholesalers expanded their footprints to accommodate e-commerce sales growth and to hold more inventory to guard against supply chain disruptions. Third-party logistics (3PL) operators took second place, signing 18 of the top leases, up from 10 in 2021. E-commerce companies followed closely behind with 14 of the top 100, down from 21 in 2021.
“Despite an expected recession, the leasing of mega-facilities is expected to remain solid this year as many occupiers continue to build out their e-commerce operations and sustain their inventory levels,” said John Morris, president of Americas Industrial & Logistics for CBRE. “Strong demand for mega-warehousing centers is expected to continue in 2023 and a large number of construction completions will provide more opportunities for expansion.”
“Looking ahead, while economic conditions will create some challenges and industrial occupiers and investors can expect deceleration in activity, underlying market fundamentals will support strong growth ahead,” added Barnett.
Alongside the Inland Empire, other top lease markets included traditional mainstays like Chicago and Atlanta, as well as growing markets including Dallas-Fort Worth, Phoenix and Columbus.
Top 10 Leading Markets for Top 100 Lease Transactions in 2022
Top Markets -- Number of Transactions -- Total sq. ft. (millions)
Inland Empire -- 17 -- 20.9
Chicago -- 11 -- 10.4
Atlanta --8 -- 8.0
Savannah -- 6 -- 6.8
Dallas-Fort Worth -- 6 -- .9
Houston -- 6 -- 7.0
Phoenix -- 4 -- 4.6
Memphis -- 4 -- 3.6
PA I-78/81 Corridor -- 4 -- 4.2
Columbus -- 4 -- 4.3
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