California’s Inland Empire Tops List of Largest Warehouse Deals in 2019 – CBRE Report

27 Jan 2020

IE-Industrial

Los Angeles – Southern California’s Inland Empire (IE) topped the list of the 100 largest warehouse deals in the U.S. last year with 21 transactions totaling 17.5 million square feet, according to a new report from CBRE.

The Inland Empire outperformed the next closest market (PA I-78/81 Corridor) by 10 million sq. ft. E-commerce users accounted for 13 of the transactions, ranging in size from 598,000 to 1.4 million sq. ft.

While major e-commerce players dominated most of the deals in 2019, growth also came from traditional retailers that implemented omnichannel strategies to satisfy the rise in online sales as well as the expanding food and beverage industry.

“The Inland Empire continues to lead because it is basically five years ahead of any other market in the nation,” said Kurt Strasmann, executive managing director based at CBRE’s Newport office and Southern California functional industrial & logistics market leader. “It is the destination for especially large users due to the amount of quality product. Every industrial developer is here because of our strategic location close to the ports, our business infrastructure and our large local consumer base. It all started here, will continue to be here, and it will remain to be ahead of any other U.S. region for the foreseeable future.”

Of the 100 largest warehouse deals in the IE, facilities leased by logistics and e-commerce companies accounted for 71 percent of the square footage transacted in 2019 for a total of more than 29.5 million sq. ft. Logistics activity remained strong in 2019, in part buoyed by steady demand from wholesalers and manufacturers of consumer goods (durable and non-durable), looking to move inventory from warehouse to end-user.

Food & Beverage Sector Gains Ground in Largest US Warehouse Leases

The food & beverage industry, driven by the expansion of grocery delivery, significantly expanded its share of the largest 100 U.S. industrial & logistics leases by square footage last year, accounting for several million additional square feet of the largest industrial leases last year than in 2018 as grocers and distributors continue to build out their supply chains for home delivery. F&B accounted for 13 of the top industrial leases for a cumulative 13 million sq. ft., up from nine leases for 8.8 million sq. ft. in 2018.

“This report, which our team completes each year, often provides us a rough outline of important trends within the industrial and distribution sector -- and the growth of grocery delivery is a clear factor this year,” said John Morris, Executive Managing Director leading CBRE’s Americas Industrial & Logistics business. “E-commerce and logistics companies are the needle movers, but food & beverage quickly has established itself as a major player in industrial real estate leasing.”

Added Southern California’s Strasmann, “Drilling down into who is actually leasing these large spaces in the Inland Empire, it is clear that F&B has been kicking it up in this region, driven by rising current demand of online grocery and food sales and the anticipation of further growth in that sector. This is also increasing the popularity of more specialized product in this region, such as cold storage warehouses.”

To download the report, click here.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2021 revenue). The company has more than 105,000 employees (excluding Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of 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.