Million-Square-Foot Warehouse Leasing Surges
A wave of new construction completions led to a decline in lease rates, however leasing of megawarehouses of 1 million sq. ft. or larger increased in the first half of this year according to a new report from CBRE.
Industrial occupiers signed leases for 31 megawarehouses in the first half of the year, a 35% increase from the 23 recorded in last year’s first half.
Meanwhile, new supply in the 1 million-sq.-ft.-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 largest 100 industrial leases got even larger in the first half,” said John Morris, CBRE President of Americas Industrial & Logistics, in a statement. “The uptick in leases of 1 million-sq.-ft. warehouses, in particular, indicates that the market is starting to absorb excess supply.”
The average size of leases in the largest 100 increased to 814,000 sq. ft. from 791,000 sq. ft. a year earlier.
Claiming the largest shares of the 100 leases were traditional retailers and wholesalers with 30, followed by third-party logistics providers (29), e-commerce operators (14) and food & beverage companies (13).
On the market level, California’s Inland Empire once again accounted for the largest number of the top 100 leases in the first half.
