Despite Concerns, Momentum Continues To Build For E-Commerce In U.S. Warehouse Leasing
The U.S. industrial market is increasingly being driven by e-commerce, according to a new report by CBRE, which found that e-commerce and logistics companies represented a larger share of the 100 largest industrial leases signed in 2018 than a year earlier.
E-commerce companies and logistics firms inked 61 of the largest 100 leases of last year, for a total of 61.5M SF, the report says. In 2017, those two sectors claimed 52 of the largest leases for a cumulative 43.2M SF.
The e-commerce industry’s share — 41 all together — of these top deals includes retailers that are implementing omnichannel strategies. Logistics companies signed 20 of the 100 biggest deals, 40% of which involved e-commerce distribution.
Manufacturers' share was 13 of the largest deals last year, while food and beverage operations accounted for nine deals.
Fifty of the 100 deals were for warehouses sized 970K SF or more, reflecting demand for large, modern buildings, according to CBRE.
These mega-transactions were spread across 32 markets, with the Inland Empire, Pennsylvania's I-78/81 Corridor and Dallas/Fort Worth seeing the largest volume of transactions by square footage.
“These figures show there still is a lot of momentum behind e-commerce uses in U.S. warehouse leasing, despite concerns that the sector’s expansion may be reaching its later stages,” CBRE Global Head of Industrial & Logistics Research David Egan said in a statement.
“We expect this type of leasing momentum to continue in 2019,” Egan said.
A recent report by JLL essentially reached the same conclusion, reporting that e-commerce and other logistics-related industries enjoyed more leasing activity in 2018 than any other sector.
E-commerce and logistics users signed eight out of 13 leases of 1M SF or more last year, according to JLL, or 62% of the total, up from 52% in 2017.
A hot leasing market for e-commerce-ready space is also driving development and rent growth. Nearly 1B SF of new industrial space came online during the last three years, but demand is even stronger, according to Transwestern.
