sveta AdobeStock_137056362
Leasing of megawarehouses of 1 million square feet or larger increased in the first half of this year as a wave of new construction completions led to a decline in lease rates for the category, according to a new report from CBRE.
“The largest 100 industrial leases got even larger in the first half,” says John Morris, CBRE president of Americas industrial and logistics. “The uptick in leases of 1 million-square-foot warehouses, in particular, indicates that the market is starting to absorb excess supply.”
Key takeaways:
- Industrial occupiers signed leases for 31 megawarehouses in the United States in the first half, a 35% increase from the 23 recorded in last year’s first half. Meanwhile, new supply in the 1 million-square-foot-plus category contributed to first-year taking rents declining by 2.2% from 2023 levels. In contrast, lease rates for all sizes of warehouses increased by 7.7% in that timeframe.
- The average size of leases in the largest 100 increased to 814,000 square feet from 791,000 square feet a year prior.
- Claiming the largest shares of the 100 leases were traditional retailers and wholesalers, followed by third-party logistics (3PL) providers, e-commerce operators and food and beverage companies.
- Much of the warehouse construction completed this year was started months or years ago, when market conditions were different.
- California’s Inland Empire once again accounted for the largest number of the Top 100 leases in the first half, followed by Memphis and Dallas/Fort Worth.
