Mid Atlantic Research Reflections 2023 3PLs

November 28, 2023 10 Minute Read

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In 2023, national industrial markets are normalizing from peak levels of activity recorded over the past 3 years. Shipping traffic and container volumes have declined as retailers and wholesalers reduce the excess inventories that they stored to account for disruptions to the supply chain over the last few years. Still, as retailers and manufacturers seek ways to reduce costs and focus on their core competencies by offloading their logistics solutions, 3PLs remain the most active sector in the nation for the fourth year in a row, accounting for 31% of leases over 100,000 sq. ft. year-to-date, according to CBRE Research.

In contrast to nationwide trends, wholesalers and retailers are the most active sector in all Mid-Atlantic markets except for Norfolk, signing for a total 7 million sq. ft. and accounting for 36% of total leasing activity. The second-most active sector is third-party logistics, with 3PLs signing leases totaling 2.9 million sq. ft., which represents 15% of gross leasing activity. With direct access to major ports and global shipping lines, the Baltimore and Norfolk markets generate the most 3PL demand in the Mid-Atlantic, accounting for nearly 80% of 3PL activity year-to-date. Baltimore, which is twice the size of the Norfolk market, led the region for 3PL leasing activity. Meanwhile Norfolk, which has a busier port, recorded the highest market share of 3PL transactions, despite being a more supply-constrained market.