LOS ANGELES—E-commerce and logistics companies claimed a larger share of the 100 largest industrial-and-logistics leases signed in 2018 than they did a year earlier, according to a CBRE report.
Sixty-one of the largest 100 leases were signed by logistics and e-commerce companies for a total of 61.5 million square feet. Previously, both of these niches claimed 52 of the largest leases for a total of 43.2 million square feet.
“Due to robust employment rates and high consumer confidence, people are buying more home goods, food and clothing and all of these items need to be stored and processed. Additionally, more and more people are shopping online and retailers are scrambling for space,” says Matthew Walaszek, CBRE Senior Research Analyst in Global Industrial & Logistics.
In addition these leased spaces are getting larger than ever. The 100 largest leases from last year, according to the report, encompassed logistics, e-commerce, technology, retail, food and beverage plus manufacturing, equaling 19% more space than the largest lease in 2017.
Last year’s largest industrial lease agreements covered 32 markets including Columbus, Pennsylvania’s I-78/I-81 corridor, St. Louis, Atlanta, Detroit, Chicago, Dallas-Fort Worth and California’s Inland Empire. Most retailers’ last mile strategy is to look for facilities, whether it is retrofitting existing structures or locating available land on which to build, that will allow them to quickly and efficiently fulfill orders, Walaszek tells GlobeSt.com.
These cities offer the logistics facilities that a lot of e-commerce users are seeking plus these regions are equipped to provide a qualified labor pool plus transportation access.
“It is easier to employ people when these logistical facilities are located in metropolitan areas versus the outlying areas,” explains Walaszek. “As we look ahead, we expect this high level of industrial leasing to continue throughout 2019.”