Industrial Occupiers Undeterred by Economic Uncertainty, Still in Expansion Mode, According to New CBRE Survey

Strong demand in the industrial market is expected to continue, though likely not at the record pace set in 2021, according to a new Industrial Occupier Survey from CBRE. Of the 100 U.S.-based respondents, 64% overall and 81% of Third-Party Logistics (3PLs) companies are planning to expand their real estate footprint over the course of the next three years, despite economic uncertainty.

In addition to 3PLs, food and beverage (75%) and building materials and construction (75%) companies also intend to expand their real estate footprints in the face of supply chain disruptions, labor shortages and high occupancy costs.

“The U.S. industrial market is continuing to see robust demand, and companies are adding warehouse and distribution space to protect their inventories, diversify their supply chains and process growing e-commerce sales,” said John Morris, CBRE President of Industrial & Logistics in the Americas. “Even with a more challenging economic backdrop, we’re still seeing that companies are interested in expanding their footprints in the short-term.”

Markets in the Southeast, Southwest and Midwest were the most favored for expansion over the next 12 to 24 months due to their proximity to strong logistics hubs, robust labor forces and transportation nodes. Other top factors driving site selection were occupancy cost, lease options, transportation networks, building design and the quality of local infrastructure.

Distributors and e-commerce occupiers have returned to a “bread and butter” mentality regarding essential building features. When selecting a new warehouse, 81% of occupiers identified clear height as one of the most important building features, with the number of loading bays/dock doors (76%) and power supply (56%) also ranking highly.

When selecting a new warehouse, occupiers identified the following features as critically important:

The Survey was conducted over the summer of 2022 and reflects the responses from a diverse array of industrial occupiers, most of which are engaged in distribution and/or manufacturing activities. To read the full report, click here.