“We’re seeing the growth due to growth of ecommerce as a great deal of grocery business approach online fulfillment,” Walaszek said. “Food sales in general are growing significantly, and they require a lot more cold storage capability. It’s an indicator to us it’s definitely a subsector to enjoy.”
Walaszek stated while the variety of major ecommerce storage facility deals did slip a bit, it was mostly a function of less megadeals than in 2018, not a more comprehensive slowdown in demand. “We’re continuing to see ecommerce expand and have a big impact,” he said. “Keep in mind this is simply the top 100 deals however it’s an excellent barometer of the general market. Ecommerce and 3PLs represent a great deal of activity.”
“There’s constantly a ton activity in the Inland Empire and in central Pennsylvania, as they’re both serving significant population centers on both coasts,” Walaszek said. “Memphis is fascinating, as it was not in the top 5 last year. It’s not a market we had actually necessarily consider leading tier, although we are seeing a lot of big-box offers recently. It’s absolutely one to see.”
Matthew Walaszek, associate director of research study Americas in industrial logistics for CBRE, stated the results for food and beverage were not unexpected, given the development and financial investment in the space.
In regards to major markets, CBRE reported that California’s Inland Empire again saw the most megadeals, with 21 leases amounting to 17.5 million square feet. This was followed by Pennsylvania’s 1-78/ I-81 passage (8 deals, 7.5 million square feet); Memphis (9 deals, 6.9 million square feet); Dallas-Fort Worth (7 offers, 6.1 million square feet); and Atlanta (6 deals, 5.4 million square feet).
In 2019, there were 13 warehouse leases amounting to 13 million square feet in CBRE’s top 100 for food and drink, which is largely made up of freezer area As food processing, compared to 9 leases totaling 8.8 million square feet in 2018. By comparison, there were 34 deals for ecommerce fulfillment and warehouse totaling 30.8 million square feet, down from 41 and 43.1 million square feet the prior year.
“Yes, we’re seeing big need for smaller sized footprints as companies look to have more sites in tactical locations near to populations, metropolitan and rural in this environment of rapid delivery,” he stated. “However, there’s minimal availability when you get down to 40,000 or 50,000 square feet, much less than in the big-box sector, so it’s a difficulty for business to discover these kinds of facilities.”
Fueled by continued development in e-grocery and the sector in general, food and beverage saw more growth in terms of major storage facility leases in 2019 than did ecommerce, which slipped a bit, according to a report from CBRE on the 100 biggest offers of the year.
3PL activity saw 20 storage facility handle the leading 100, the like in 2018, but the total square video footage dropped from 18.3 million to 15.8 million square feet. In general, the industrial and business job rate stood at 4.4% since Q4 2019, according to CBRE. This figure consists of vacant area plus area that is presently inhabited but being marketed in anticipation of a move-out.
At the other end of the marketplace, there continues to be a great deal of activity in facilities under 100,000 square feet, Walaszek said, as retail and ecommerce companies straighten their supply chains to move ever closer to diminish and demand centers time to customer.
As food processing, compared to 9 leases amounting to 8.8 million square feet in 2018. 3PL activity saw 20 warehouse deals in the top 100, the very same as in 2018, but the overall square video dropped from 18.3 million to 15.8 million square feet. Walaszek stated while the number of significant ecommerce warehouse deals did slip a bit, it was primarily a function of less megadeals than in 2018, not a broader slowdown in demand. In terms of major markets, CBRE reported that California’s Inland Empire once again saw the most megadeals, with 21 leases totaling 17.5 million square feet.