Dallas, TX
As U.S. Warehouse Market Ages, Robust Warehouse Construction is Spurred by Demand for Larger, More Modern Facilities
CBRE report: With average warehouse age at 43, developers are building new facilities at record levels to meet the demand for modern features, design and amenities
September 19, 2022
Media Contact
Kris Hudson
Corporate Communications
The advanced age of U.S. warehouses—43 years on average—is continuing to spur record construction activity as big e-commerce and retail distributors demand larger, more modern facilities, according to a new report from CBRE. Construction activity in 2022, as of the end of the second quarter, totaled a record 627 million sq. ft.
A quarter of existing warehouse space is aged more than 50 years and most of that product tends to have a smaller footprint and lack the features, design and amenities required by modern distributors. In contrast, newer warehouses tend to measure larger than 200,000 sq. ft (often into the seven-digit sizes) and feature high ceiling heights, air conditioning, huge floorplans and cross-dock layouts to allow for fast unloading and reloading.
Robust construction over the past decade has expanded overall U.S. warehouse square footage by 18.6 percent, mostly due to the need for larger facilities.
“The warehouse sector has undergone more modernization other than many other asset classes in commercial real estate over the past 10 to 20 years,” said John Morris, CBRE’s Americas President of Industrial & Logistics. “The market can support more of these bigger, better buildings as well as most of the older facilities. Those that become truly obsolete can and likely will be redeveloped into other uses.”
That’s not to say that older buildings aren’t in demand. Rather, warehouses older than 40 years are more than 95 percent occupied on average. Many of those older facilities are in urban, infill locations that are ideal for distribution to large, densely packed populations.
Markets with the youngest average warehouse age tend to be those with relatively available, affordable land and within an ideal distribution radius of large population centers.
*In millions of sq. ft.
To read the full report, click here.
A quarter of existing warehouse space is aged more than 50 years and most of that product tends to have a smaller footprint and lack the features, design and amenities required by modern distributors. In contrast, newer warehouses tend to measure larger than 200,000 sq. ft (often into the seven-digit sizes) and feature high ceiling heights, air conditioning, huge floorplans and cross-dock layouts to allow for fast unloading and reloading.
Robust construction over the past decade has expanded overall U.S. warehouse square footage by 18.6 percent, mostly due to the need for larger facilities.
“The warehouse sector has undergone more modernization other than many other asset classes in commercial real estate over the past 10 to 20 years,” said John Morris, CBRE’s Americas President of Industrial & Logistics. “The market can support more of these bigger, better buildings as well as most of the older facilities. Those that become truly obsolete can and likely will be redeveloped into other uses.”
That’s not to say that older buildings aren’t in demand. Rather, warehouses older than 40 years are more than 95 percent occupied on average. Many of those older facilities are in urban, infill locations that are ideal for distribution to large, densely packed populations.
Markets with the youngest average warehouse age tend to be those with relatively available, affordable land and within an ideal distribution radius of large population centers.
| Market | Average Warehouse Age | Warehouse Inventory* |
| Inland Empire | 28 years | 561 million |
| Phoenix | 33 | 251.2 |
| Indianapolis | 34 | 217.8 |
| PA I78/I81 Corridor | 36 | 396.3 |
| Houston | 37 | 427.4 |
| Atlanta | 37 | 611.6 |
| Dallas/Fort Worth | 41 | 688.8 |
| Columbus | 43 | 207.1 |
| Chicago | 44 | 749.5 |
| Los Angeles | 47 | 470.2 |
To read the full report, click here.