The Inland Empire (IE) signed the most large industrial leases for the greatest amount of space out of all U.S. metros in the first half of the year, according to a release from a representative of CBRE that summarizes a recent report from the firm. The market logged 14 transactions totaling 11.6 million square feet, the report says.
The IE is known for its large industrial buildings and mega warehouses.
Dan de la Paz, EVP at CBRE, is quoted in the statement as saying, “Most of the larger deals in the Inland Empire are with companies that plan to take advantage of the taller 36-foot to 40-foot clear buildings available in the Inland Empire, investing substantial capital in sortation, material handling, and racking systems that will allow e-commerce applications to work with regular distribution. A few apparel and home-improvement retailers are currently taking down 800,000 square-foot to 1.4 million-square-foot properties. Business-to-business operations are also investing heavily into the area’s new modern warehouses.”
The statement says the demand for e-commerce distribution space was the impetus for many of the largest industrial and logistics (I&L) leases completed in the U.S. in the first half of this year. According to the release, the firm’s analysis of the 100 largest leases for I&L space by square footage found that 56 were signed y e-commerce companies and third-party-logistics companies, which predominantly handle distribution for goods purchased online. Also, the balance of the first half’s largest I&L leases were signed by manufacturers (14 leases), food-and-beverage providers (11), retailers (seven), technology companies (four) and an “other” catch-all category (eight).
The IE is joined by other strong markets for big industrial leases including Atlanta, Chicago, Pennsylvania’s I-78/I-811 corridor, and Dallas-Fort Worth, the release says. “Adam Mullen, Americas leader of I&L for CBRE, is quoted in the statement as saying, “The supply-chain arms race is as competitive as it’s ever been. While e-commerce is driving many new leases, there is still a solid diversity of users throughout the top 100 leases. That’s good for the warehouse and distribution industry overall. and the strength to 3PLs shows that companies are striving to create the most flexible and nimble distribution networks possible.
As SoCal Real Estate reported in August, the Inland Empire recorded the highest overall industrial absorption figures out of all markets nationally for the first half of 2018, according to a report released by a representative of Colliers International. The market saw 14.4 million square feet of industrial absorption between January and June this year, the report shows.