Last year was a record year for large warehouse leases, driven by a rebounding economy and strong e-commerce sales. Companies committed to 57 warehouse leases of 1 million square feet or larger across the U.S. in 2021, a 19% increase from 2020, according to new data released Tuesday by CBRE. Central Jersey ranked ninth in the U.S., with five of the Top 100 largest leases, totaling 4.6 million square feet.
CBRE charted the increase in mega warehouse leases as part of its analysis of the 100 largest U.S. industrial & logistics leases of 2021. CBRE found that, among those 100 leases, the average 2021 transaction size increased to 1.053 million square feet, slightly above 2020’s average of 1.038 million square feet.
“The trend of broad industrial demand by a variety of industries is expected to continue this year, as strong retail sales and the need to hold more inventory close to consumer markets is expected to increase the average transaction size,” said Thomas Monahan, vice chairman at CBRE. “A possible headwind to this forecast is a dwindling supply of mega facilities, especially in core markets such as central New Jersey with little land available for development.”
The industry sector claiming the largest share of those 100 leases is general retail and wholesale, which recorded 44 transactions (46.1 million square feet). This was a significant jump from 2020, when that sector recorded 32 transactions (35 million square feet). E-commerce-only occupiers, last year’s leader, were second at 21 deals (27 million square feet), followed by food and beverage users at 15 deals (14.2 million square feet).
On a total square footage basis, the Pennsylvania I-78/81 Corridor led with 12.4 million square feet transacted and also had the most 1 million-square-foot or more transactions (10). Demand is robust in this market because it is one of the last in the Northeast with a sizeable amount of available land for development. Chicago accounted for 12 of the Top 100 transactions, followed closely by the Pennsylvania I-78/81 Corridor with 11 and the Inland Empire with 10.