Fewer Mega Industrial Leases Signed in 2023, CBRE Finds

(Image courtesy of CBRE; Breakout image courtesy of Pixabay/pexels.com)

CBRE, Dallas, found that there were fewer industrial leases of 1 million square feet or more in 2023 compared with 2022. Of the top 100 industrial leases signed last year, 43 were for at least 1 million square feet, compared with 63 in 2022.

The total square footage of the top 100 industrial leases in 2023 was 98.6 million square feet, down by 8% from 106.9 million in 2022.

And, the average lease size fell to 986,744 square feet from 1.07 million square feet.

Among the top 100, 30 were renewals, compared with 24 in 2022.

There was a more diverse mix of tenants leasing the large industrial spaces in 2023 compared with 2022.

The number from traditional retailers/wholesalers fell to 30 from 53. Third-party logistics operators rose to 29 from 11. There were also more leases from the food and beverage, auto, building materials, manufacturing and medical sectors.

“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. 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,” said John Morris, President of Americas Industrial & Logistics for CBRE.

In terms of where these leases are, the Pennsylvania 1-78/81 Corridor led, with 17 of the top 100 leases. Next was the Dallas-Fort Worth area, followed by the Memphis, Tenn., region.