Why Warehouses Are Taking Over The U.S.

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The U.S. is facing a warehouse shortage, with 1 billion square feet of new industrial space needed by 2025 to keep up with demand, according to commercial real estate services company JLL. More e-commerce activity and faster delivery is driving up demand and shifting local economies, like in the Lehigh Valley region of Pennsylvania. Now, open land is scarce, forcing real estate developers to find unconventional spots, like a scuba diving center, if they want to keep building. For every Cyber Monday purchase, there is a warehouse employee packing up those soon-to-be presents. The big online shopping holiday comes amid a warehouse shortage across the United States as distribution center vacancy rates are at all-time lows. Nearly 96% of existing industrial space is in use, according to commercial real estate services company JLL. The U.S. may need an additional 1 billion square feet of new industrial space by 2025 to keep up with demand, JLL estimates. “The industry is effectively sold out through the next year,” Chris Caton, managing director of global strategy and analytics at Prologis, told CNBC. Rents are at all-time highs and pre-leasing rates have skyrocketed, which is when warehouses are leased before construction is even complete. “The leasing volume is almost triple in some cases to what’s being built every year,” Mehtab Randhawa, senior director of industrial research for the Americas at JLL, told CNBC. For example, another nearly 190 million square feet of ware

Published 2021-11-29 · Watch on YouTube ↗
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