Lease rates for megawarehouses of 1 million sq. ft. or larger rose by 35% in the first half of the year, despite an increase in new construction. New supply levels contributed to a slight decline in rents for these large facilities. Traditional retailers and wholesalers were the primary lessees. Warehouse customers consistently face limited capacity and the need for real-time communication and service, particularly in high-demand markets like California’s Inland Empire. PRIMO’s cross-docking and strategic network locations provide extensive capacity solutions and innovative real-time tracking technologies to optimize warehousing operations and enhance customer satisfaction.

• Increase in Megawarehouse Leases: The average size of leases in the largest 100 warehouses increased to 814,000 sq. ft. from 791,000 sq. ft. last year. There was a 35% increase in leases for megawarehouses of 1 million sq. ft. or larger in the first half of this year.
• Lease Rates: Despite the increase in megawarehouse leases, first-year taking rents declined by 2.2% due to new supply³. However, lease rates for all warehouse sizes increased by 7.7%.
• Market Leaders: California’s Inland Empire had the largest number of top 100 leases, followed by Memphis, Dallas/Fort Worth, and Pennsylvania’s I-78/I-81 Corridor.
• Industry Insights: Traditional retailers and wholesalers claimed the largest share of the top 100 leases, followed by third-party logistics providers, e-commerce operators, and food & beverage companies.

Reference: mhlnews.com