Dallas - March 7, 2019 - 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, underscoring the growing influence of those companies on U.S. warehouse construction, according to a new report from CBRE.
CBRE's analysis of last year's industrial-leasing activity in the U.S. found that 61 of the largest 100 leases were signed by e-commerce companies and logistics firms for a total of 61.5 million sq. ft. In the previous year, those two sectors claimed 52 of the largest leases for a cumulative 43.2 million sq. ft.
The Dallas-Fort Worth market had 10 of the largest warehouse leases for a total of 11.1 million sq. ft. in 2018, trailing only the Inland Empire in Southern California and the PA I-78/81 Corridor in Eastern Pennsylvania. Six of the leases in DFW were for e-commerce and logistics companies, putting the area on par with the national trend. These figures were slightly down from 2017, when 13 warehouse leases were signed in the DFW metroplex for a total of 11 million sq. ft. Six of those leases were for e-commerce and logistics companies.
"In 2018, DFW's industrial real estate market saw unprecedented demand for a multitude of reasons," said Ryan Keiser, Executive Vice President with CBRE's Industrial & Logistics practice in Dallas. "The growth of e-commerce—specifically the ever-increasing e-commerce service levels such as two-day, same-day and white glove delivery options—was a huge factor. We also are seeing demand for distribution centers due to the Metroplex's location and transportation infrastructure, and we see strong local demand due to the area's population growth."
Keiser expects comparable demand for industrial and logistics real estate in 2019. "DFW's real estate and labor markets continue to represent an 'easy button' for corporate users needing to expand their supply chains due to DFW's availability of cost effective industrial real estate and quality labor," said Keiser.
The e-commerce and logistics industries are related in that many logistics companies, specifically third-party logistics providers, handle e-commerce distribution for their clients.
"These figures illustrate that there still is a lot of momentum behind e-commerce uses in US warehouse leasing, despite concerns that the sector's expansion may be reaching its later stages," said David Egan, CBRE's Global Head of Industrial & Logistics Research. "We expect this type of leasing momentum to continue in 2019."
Regardless of industry, the largest industrial leases got even larger last year. The largest 100 from last year - spanning uses such as e-commerce, logistics, manufacturing, food and beverage, technology and retailing - totaled 19 percent more space than the largest of 2017.
Last year's largest industrial leases were spread across 32 markets, with many clustering in leading logistics hubs including California's Inland Empire (20 leases), Pennsylvania's I-78/I-81 corridor (11), Dallas-Fort Worth (10), Atlanta (nine) and Chicago (five). Others claiming several large leases were Columbus (four), Detroit (four) and St. Louis (three).
"These are among the leading markets that offer the high-quality logistics facilities that many of these e-commerce users are seeking," said Chris Zubel, CBRE Americas Industrial & Logistics Investor Leader. "This activity builds upon itself when a region provides the transportation access, qualified labor pool and state-of-the-art real estate that many e-commerce users need."
To read the full report, click here.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE: CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world's largest commercial real estate services and investment firm (based on 2018 revenue). The company has more than 90,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 480 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.