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In a warehouse, a robotic arm picks up a cardboard package. Getty Images | onurdongel | E+ According to a new survey, as merchants expand their e-commerce businesses and invest in speedier delivery for customers, the demand for warehouse space is skyrocketing. According to commercial real estate services firm JLL, demand for logistics facilities to store inventory, pack, and ship online orders will be at an all-time high this year among mass merchandisers. Walmart, Target, Big Lots, TJX, and Costco are among the big-box and value retailers bidding for warehouse space, according to JLL. Some of these businesses are attempting to catch up to Amazon, which has been acquiring warehouses in strategic places across the country for years. This buying and leasing activity has now moved to more densely populated places, such as New York City. In an interview, Craig Meyer, president of JLL’s Americas industrial division, said, “We’ve been on a long-term journey of transforming consumer behavior from buying in stores to buying online.” “In the United States, that is the existential driver of demand.” JLL Research is the source for this information. Businesses, especially third-party logistics providers such as UPS and FedEx, face substantially tighter competition for warehouse space in a few important markets in the United States. JLL discovered that demand has soared in Columbus, Ohio, a market where roughly half of the country’s population is within a one-day trip. JLL predicts that industrial real estate demand in Columbus would increase by 61 percent in 2021 compared to 2020, after increasing by 13.7 percent the previous year. Meanwhile, as ports around the coast of Southern California face severe backlogs, demand for warehouse space in Savannah, Georgia, is at an all-time high. According to JLL. According to the report, demand for industrial real estate in the Savannah area has increased by about 10 million square feet in the last year. According to the Georgia Ports Authority, container volume entering Savannah’s port climbed by 28% from 2016 to 2020. The GPA board has approved money to improve the port’s capacity to accommodate more containers. “Cargo is moving from the West Coast to the East Coast. And this has been going on for a while, but Covid worsened it once again “Meyer remarked. “As [containers] come off the boat, a lot of companies are eager to get there as a staging location.” According to additional statistics from the real estate firm CBRE, taking rentals, which are the base rents that landlords and tenants agree on, are rising faster than asking rents across the country. Another symptom of a hot market is this. CBRE revealed that industrial taking rentals increased 9.7% in the first five months of 2021 compared to the same period the previous year. Over the same time period, asking rents only increased by 7.1 percent. “We’ve seen huge, high-density leases signed in Brooklyn, Queens, and marketplaces all throughout New York City,” Meyer added. “And what’s surprising about them is that they have rentals that are comparable to those of office buildings. Because being near to that cluster is so important for the final mile.” Prologis, the largest owner and manager of logistics real estate in the United States in terms of square footage, finds a significant gap between supply and demand. In an interview, Chris Caton, the head of Prologis’ research group, said, “Momentum in the marketplace is incredibly strong, and this is against a backdrop where there’s very high scarcity in our company.” “Vacancy rates in the United States are at a 40-year low of 4.5 percent. There has never been a period when there has been less available to lease at a time when customers really need it.”/nRead More

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