Real estate firm CBRE is out with its annual review for 2022 of so-called “big box” distribution centers, defined as facilities taking up more than 200,000 square feet
Supply Chain Digest Says...
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Demand is predicted to remain strong, with a record 455 million square feet of big box space under construction, with 25.3% of the pre-leased.
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As shown in the graphic below, there were all told 12,766 big box DCs in North in North America 2022, CBRE says, representing 5.3 billion square feet of space. That compares with 11,079 big box DCs in 2021. 1430 of the total big box facilities are 750,000 square feet or more.
But almost all of that space was leased, with an overall vacancy rate of just 3.3% at year end, matching 2021’s record low.
This driving up first-year base rents by a steep 23% year-over-year. But they went up much higher in some markets, rising an amazing 60.3% in the Inland Empire near Los Angeles, 52.0% in Montreal, and 40.9% in Toronto.
Nine metro markets had lease rate growth of 25% or more.
In many markets vacancy rates for big boxes are almost unbelievably low. For example, vacancies stood at just 0.1% in the Inland Empire, 0.9% in Savannah, and 2.5% in Cincinnati, to cite a few examples.
New big box space in 2022 grew mostly rapidly in Phoenix, at 14.3%, followed by Savannah (12.3%) and 9.4% in Houston.
The metro with the most box space is Chicago, at 523.2 million square feet, with southern New Jersey/Eastern PA (521) and Dallas/Ft. Worth (462.8) rounding out the top 3.
Third-party logistics (3PL) providers were the most active occupiers for the first time ever, accounting for 41% of all lease transactions in 2022
Big Box DC Data 2022
Source: CBRE
(See More Below)
General retail and wholesale had the next highest share, at 31.5%, before a big drop off to 8.5% for food and beverage. Dedicated ecommerce fulfillment center represented just 6.7% of leased space, the CBRE research found.
And demand is predicted to remain strong, with a record 455 million square feet of big box space under construction, with 25.3% of the pre-leased.
There is more data in the full report, which can be found here: 2023 North America Industrial Big Box
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