Build-to-Suit Deals Dominate Net Lease This Year

Douglas M. Longyear is a managing director at Cushman & Wakefield.

LOS ANGELES—Industrial build-to-suit projects are dominating the net lease market this year. According to Douglas M. Longyear, managing director of capital Markets in the net lease group at Cushman & Wakefield, there is more than 51 million square feet in build-to-suit industrial net lease projects that have delivered this year and another 67 million under construction that will be completed before the end of the year. That is a total of 118 million square feet of net lease industrial build-to-suits to hit the market this year.

“That is a huge number, and we are expecting that number to potentially increase in 2017 and 2018, depending on what is going on in the economy,” Longyear tells GlobeSt.com. “A lot of this activity is being driven by ecommerce. We are estimating that more than 20% of the absorption today is attributable to ecommerce requirements. That trend is going at a strong clip because the non-Amazons of the world are trying to figure out how to service the retail customer through online sales, and they are making big investments in their supply chains.”