E-Commerce Fuels I&L Leases

E-Commerce Fuels I&L Leases

The increasing demand for distribution for the e-commerce sector has fueled the growth of various industrial and logistics (I&L) leases in the United States, according to a research conducted by an industrial real estate firm based in Los Angeles.  The research analyzed the 100 biggest leases for the I&L space in the first half of 2018 and took into account leases by square footage.

E-commerce leads in I&L space

The study conducted by LA-based CBRE showed that e-commerce players led the way with 33 leases while third party logistic service providers came in next with 23 leases. Some 56 leases were also signed for facilities mainly for the distribution of goods purchased online.  Leases that were signed by manufacturers were at 14 while those made by food and beverage firms were at 11. Cumulatively speaking, the 100 facilities accounted for storage of 67.8 million square feet.

Curiously,  the e-commerce players include traditional brick-and-mortar retailers who have shifted to selling online. These players are now building their e-commerce platforms to better serve their clients.

E-commerce growth impressive

CBRE official Adam Mullen is impressed with the diversity of the sectors comprising the top 100 lease list especially with e-commerce growth.  He added that e-commerce companies also included several brick and mortar retailers that have built their own e-commerce networks.

He added that many of the third party logistic service providers in the list are also serving e-commerce kinds of uses.

Most of the leasing activities cited in the CBRE research were key US geographies such as California, Atlanta, Chicago, Pennsylvania, and Dallas-Fort Worth.  The CBRE official also says that it makes sense for big facilities to be located on these major cosmopolitan areas in order to be closer to the consumer population.