Dallas-Fort Worth was a top target for e-commerce distribution space in the first half of the year, according to a new report from CBRE.
Demand for e-commerce distribution space was the impetus for many of the largest industrial and logistics leases completed in the United States in the first half of this year, highlighting users’ preferences for large, modern facilities, according to the report.
The Dallas-Fort Worth area recorded 5.2 million square feet of industrial leases during the first half the year, with eight deals making up the total.
California’s Inland Empire led all U.S. markets with 14 transactions totaling 11.6 million square feet. Other hot markets for big leases included Atlanta (10 deals for 7 million square feet), Chicago (11 deals for 6.8 million square feet) and Pennsylvania’s Interstate 78/Interstate 81 corridor (10 deals for 6.8 million square feet).
“The D-FW industrial market continues to be a preferred destination for regional distribution and fulfillment centers as well as local distribution centers serving D-FW’s high growth demographics,” said Ryan Keiser, senior vice president in CBRE’s Dallas office. “As corporate users strive for maximum supply chain efficiencies while coping with historically low unemployment and high consumer expectations for delivery service (i.e. two-day or less shipping), we are seeing increased investment in sophisticated material-handling equipment and more focus on locating near labor submarkets that can meet demand now and long term.”
CBRE’s analysis of the 100 largest leases for industrial and logistics (I&L) space by square footage found that 56 were signed by e-commerce companies and third-party-logistics companies (3PLs), which predominantly handle distribution for goods purchased online.
The balance of the largest I&L leases in the first half of the year were signed by manufacturers (14 leases), food and beverage providers (11), retailers (seven), technology companies (four) and an “other” catch-all category (eight).
CBRE found that 30 of the leases were for warehouses larger than 750,000 square feet, reflecting e-commerce users’ preference for expansive facilities with high ceiling heights and, in many cases, modern specifications for automation and rapid movement of massive inventories. Cumulatively, the 100 largest leases covered 67.8 million square feet.
“The supply chain arms race is as competitive as it’s ever been,” said Adam Mullen, CBRE Americas leader of I&L. “While e-commerce is driving many new leases, there still is a solid diversity of users throughout the top 100 leases. That’s good for the warehouse and distribution industry overall. And the strength of leasing to 3PLs shows that companies are striving to create the most flexible and nimble distribution networks possible.” – FWBP Staff