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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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Inside The Story

CBRE's Morris

About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 16-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 7-10 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).

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