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Small-Bay Industrial Demand Outpaces Aging Supply
Demand from smaller industrial occupiers for shallow-bay properties—i.e., buildings under 50,000 square feet with clear heights of 14 to 28 feet—is outstripping available supply, CBRE reported. “Unlike big-box warehouses that have expanded rapidly in recent years, the supply of shallow-bay space has grown only modestly, leaving many markets with aging inventory and limited new construction,” according to the firm’s Shallow Bay Industrial Brief.
More than 80% of shallow-bay inventory was built before 2000 and nearly half dates from before 1980, reported CBRE. Just 5% of total inventory has been delivered since 2010. The aging supply reflects the economic challenges of building shallow-bay in major markets.
At the same time, shallow-bay vacancy began falling below the overall industrial vacancy rate in 2017, reflecting what CBRE called “growing demand for smaller-format space tied to service-oriented users and last-mile distribution.” As of 2024, it was 2.5 percentage points below the overall rate.
- ◦Development
