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Fewer Mega-Leases in 2023 for Industrial Sector
Softening demand for industrial & logistics warehousing space resulted in fewer mega-industrial leases of one million square feet or more in 2023, CBRE says in a new report. The number of mega-lease signings in the U.S. fell to 43 in 2023 from a record 63 in 2022, as economic uncertainty and changing inventory management practices weighed on demand for big-box warehouse facilities.
Last year’s top 100 industrial leases totaled 98.6 million square feet, down by 8% from 2022’s 106.9 million total. Thirty of the top 100 were renewals—six more than in 2022.
Traditional retailers and wholesalers, which previously leased industrial space at a rapid clip, signed 30 of the largest 100 leases last year, down from 53 in 2022. Meanwhile, third-party logistics providers increased their share from 11 in 2022 to 29 last year..
“Throughout the pandemic and shortly thereafter, many occupiers were forced to shift from a ‘just-in-time’ to a ‘just-in-case’ inventory management approach,” said John Morris, president of Americas Industrial & Logistics for CBRE. “This helped boost demand for warehouse space. While demand has now receded moderately, it remains historically strong. However, we do not expect as many mega industrial leases in the near and mid-term as we saw in 2022.”
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