Fewer Leases for Megawarehouses Signed in 2023

Softening demand for industrial & logistics warehousing space resulted in fewer mega industrial leases of 1 million sq. ft. or more in 2023, according to a new CBRE report. The number of 1 million-sq.-ft. lease signings fell to 43 in 2023 from a record 63 in 2022, as economic uncertainty and changing inventory management practices weighed on demand for big-box warehouse facilities.

Traditional retailers and wholesalers — previously leasing industrial space at a rapid clip — signed 30 of the largest 100 leases last year, down from 53 the year prior. Still, this category represented the largest number of top leases.

Meanwhile, third-party logistics (3PLs) companies responded to continued e-commerce growth by signing 29 of the top 100 leases in 2023, up from 11 in 2022. 3PLs operate logistics and warehousing operations for multiple companies simultaneously, improving supply chain reliability and efficiency for many customers who may be seeking supply chain scale.

“Throughout the pandemic and shortly thereafter, many occupiers were forced to shift from a ‘just-in-time’ to a ‘just-in-case’ inventory management approach. This helped boost demand for warehouse space. While demand has now receded moderately, it remains historically strong. However, we do not expect as many mega industrial leases in the near and mid-term as we saw in 2022,” said John Morris, president of Americas Industrial & Logistics for CBRE.

Top markets for these leases included traditional mainstays like the Inland Empire and Chicago, as well as fast-growing markets such as Dallas-Fort Worth, Memphis and Savannah.

Top 8 Leading Markets for Top 100 Lease Transactions in 2023

To read the full report, please click here.