Creating Resilience

E-commerce Activity Driving Absorption of Large, Modern Industrial Spaces

March 25, 2022

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Burgeoning e-commerce activity has driven higher absorption among the largest bulk warehouse facilities. This can be seen in the correlation between warehouse facility size and absorption rates in 2021. See Figure 1.

Availability rates are also lowest for large, bulk facilities; however, availability is also very low for facilities with less than 25,000 sq. ft. Many of these properties are in urban settings, where proximity to large populations, combined with high land costs that deter new development, keep availability perennially low.

These dynamics should alleviate concerns about a potential oversupply of bulk warehouse space, with major logistics markets, such as Southern California, Chicago and Atlanta, particularly well positioned to meet rising demand.

FIGURE 1: Warehouse Availability and Absorption Rates by Property Size, 2021 (%)

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