The top occupier of “big-box” warehouse leasing activity in North America during 2022 was third-party logistics providers (3PLs), who unseated the retailers and wholesalers category for the top spot, according to industrial real estate firm CBRE.
3PLs grabbed the top spot as a result of enduring pandemic-era shifts, since companies have expanded their reliance on logistics partners to create resilient supply chains and economically address customer needs, CBRE said. The 3PLs have been glad to take that extra business, which typically involves operating companies’ logistics and warehousing operations on a contractual basis, gaining efficiencies by handling that work for multiple clients simultaneously.
“During the pandemic, companies relied on partnerships with 3PLs to stabilize their operations and accommodate demand,” John Morris, CBRE’s President of Americas Industrial & Logistics, said in a release. “The initial thought was that companies would eventually return to self-reliance for their fulfillment needs, but more companies have since realized that 3PLs can play a vital role in their business models, and demand is stronger than ever.”
By the numbers, 3PLs accounted for 41% of all big-box warehouse lease transactions—defined by CBRE as 200,000 square feet or larger—and claimed the largest share for the first time since the firm began tracking the activity in 2012. Second place on that list went to general retail and wholesale (31.5%), followed by food and beverage (8.7%), e-commerce only (6.7%), automobiles, tires, and parts (5.4%), building materials and construction (4.3%), and medical (2.6%).
Encompassing the United States, Mexico, and Canada, the big-box report found that industrial facilities had record-low vacancy rates and unprecedented rent growth in 2022, despite record new construction deliveries. Demand was driven primarily by a desire to serve markets with growing populations, modernize space for automation, and improve supply chain resilience, CBRE said.
Specifically, the 2022 direct vacancy rate was 3.3% at year-end, matching 2021’s record low. With demand for space at a high, and little space available, a record 455 million square feet is currently under construction.
Judging by those numbers, CBRE said that vacancy rates will rise as time goes on, providing some rent relief for occupiers. However, new construction will likely moderate later this year, particularly with the financing market so tight, which will lead to double-digit rent growth as construction deliveries slow.