CBRE Report Ranks Columbus Among Top 10 Industrial Markets for 1 Million-Sq.-Ft. Facilities
Los Angeles, February 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 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.
Ranking at number seven, the Columbus market had three megawarehouses built between 2010 and 2016, totaling 3.4 million square feet. Two of the buildings were build-to-suits built specifically for the tenant and one was constructed speculatively with no tenant in hand.
The major drivers for Columbus continue to be its strategic location and strong logistics infrastructure, according to Rick Trott, first vice president.
“Companies can reach 47 percent of the U.S. population in a 10-hour truck drive, which is critical for e-commerce companies,” Trott said. “Additionally, the Rickenbacker International Airport is a lower cost and less congested alternative to Chicago for air freight and Norfolk Southern and CSX both have major intermodal terminals to handle overseas containers shipped by rail from east and west coast ports.”
Top Markets For 1 Million-Sq.-Ft. Warehouses Built 2010-2016:
Number of Buildings
Total Sq. Ft. (millions)
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 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.
“Additionally, developers prefer to build these big boxes in industrial-powerhouse metros that offer the best combination of exceptional transportation access and close proximity to big populations favored by e-commerce users,” he said.
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. In fact, out of the three newer megawarehouses in Columbus, only one is occupied by an e-commerce company. The other two are leased by a major home improvement retailer and a pet food manufacturer.
About CBRE Group, Inc. 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.