Inland Empire Among Top Markets with 1 Million-Sq.-Ft. Facilities
Los Angeles – Feb. 7, 2017 – The rapid growth of e-commerce has created a big trend in U.S. industrial markets: a proliferation of warehouses spanning 1 million sq. ft. or larger. The Inland Empire is among the markets that built the most such facilitates in the past six years.
The massive warehouses and distribution centers have sprouted from Southern California to Philadelphia, clustering around metro areas that provide the mix of road, rail and sea access that e-commerce users covet, according to a new report from CBRE Group, Inc.
All told, 117 such facilities were built across the U.S. from 2010 to 2016 for a total of 141.2 million sq. ft., which shows an increase from the 99 facilities built between 2003 and 2009, according to CBRE. The markets in which the most big-box construction occurred in the 2010-2016 timeframe are led by Philadelphia, California’s Inland Empire and Dallas/Fort Worth.
Looking ahead, the busiest markets for on-going construction of 1 million-sq.-ft. warehouses are led by the Inland Empire, Chicago, Philadelphia and Atlanta. Across the 10 busiest U.S. markets for this type of construction, 29 such facilities are underway.
“The Inland Empire continues to dominate in attracting large e-commerce users in the region due to the availability of brand-new, state-of-the-art facilities,” said Kurt Strasmann, senior managing director of CBRE’s Orange County operations and Southern California industrial & logistics market leader. “No other region has access to this much new product so close to an international port, 20 million people within 60-90 minutes and a deep business infrastructure with massive amount of consumer purchasing power. The combination of these factors makes this region second to none.”
While massive warehouses aren’t purely a phenomenon of e-commerce, the two are closely related. E-commerce users typically need two to three times the amount of warehouse and distribution space that traditional users do. That’s mostly because e-commerce fulfillment requires more inventory, labor and automation.
“The spread of these big-box facilities tells us several things,” said David Egan, CBRE’s Head of Industrial & Logistics Research in the Americas. “Primarily, it underscores the rapid growth of e-commerce, since these megafacilities serve as the backbone of retailers’ fulfillment networks, distributing goods across multistate regions.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2015 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.