Almost half of the 167 million sq. ft. of U.S warehouse space currently under construction—72 million sq. ft.—is already pre-committed to tenants, primarily e-commerce, third-party logistics and retail users, according to a new report from CBRE Group, Inc.
The current tally of pre-committed warehouse space is the highest since 2000. In addition, the current ratio of space under construction that is pre-leased to occupiers – 43 percent – exceeds the 17-year average of 38 percent. That signals healthy momentum for the market.
When looking at the 10 U.S. markets with the largest amount of warehouse construction underway as of Q1 2017, 36 percent of space under construction is pre-committed. Pennsylvania’s I-78/I-81 Corridor, which ranks fourth in the nation when it comes to warehouse space under construction (13,482,425 sf), has 32.8 percent of its space pre-leased.
“The Eastern Pennsylvania Market (Carlisle to the Lehigh Valley) continues to see great preleasing activity and quick absorption of recent deliveries,” said Sean Bleiler, CBRE Senior Vice President based in Allentown. “Year to date 2017, the market has absorbed nearly all of the new projects delivered over 750,000 sq. ft. New construction continues to be absorbed in all size ranges, but tenants favor seeing vertical building construction prior to commitment to diminish delivery risk. “
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2016 revenue). The company has more than 75,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
