Where the Mega Industrial Deals Are Being Signed
Emerging areas with major logistics hubs are expected to be active this year but a scarcity of land could hinder growth.
A record 57 transactions in 1 million square feet or larger facilities were signed last year, 19% more than in 2020, according to CBRE. Only 18 of the top 100 transactions in 2021 were renewals, a sign that demand is coming from a range of occupiers and the appetite for expansion space is large.
CBRE suggested more of the top 100 leasing deals could occur in emerging markets near major logistic hubs and growing population centers such as Phoenix, Greenville/Spartanburg, S.C., Louisville and San Antonio in 2022.
One possible headwind to this forecast, though, is a dwindling supply of mega facilities, especially in core markets with little land available for development.
Pennsylvania I-78/81 Corridor a Leader in 2021
On a total square footage basis, the Pennsylvania I-78/81 Corridor led with 12.4 million square feet transacted and also had the most one million-square feet or more transactions at ten. Demand is robust in this market because it is one of the last in the Northeast with a sizable amount of available land for development.
Chicago accounted for 12 of the top 100 transactions, followed closely by the Pennsylvania I-78/81 Corridor with 11 and the Inland Empire with 10.
Strong retail sales and the need to hold more inventory close to consumer markets increased the average transaction size of the top 100 transactions to 1.053 million square feet, slightly above the 1.038 million-square feet average in 2020.
General retailers and wholesalers that distribute to both online consumers and brick- and-mortar stores led with 44 transactions totaling 46.1 million square feet, compared with 32 transactions totaling 35 million square feet in 2020.
E-commerce-only occupiers accounted for 21 deals totaling 27 million square feet in 2021, down from 35 totaling 35 million square feet in 2020. Food & beverage companies accounted for more activity with 15 transactions totaling 14.2 million square feet, up from 11 transactions totaling 10.7 million square feet in 2020.