Warehouse space sold like hotcakes last year as retailers scrambled to find ways to boost their e-commerce operations and save money.
The 25 largest retailers snapped up roughly 38 million square feet of new industrial space last year, The Wall Street Journal reported, citing data from commercial real estate data provider CoStar Group Inc. That’s up from 18.8 million square feet acquired in 2019, and it’s the highest total over the last decade.
The biggest retailer of warehouse space is Amazon, which has 78 buildings covering 83.6 million square feet, but other major retailers have been ramping up acquisitions. Columbus, Ohio, Tampa, Florida, and Savannah, Georgia, are all particularly hot markets for retail warehouse space this year.
Retailers have become increasingly eager to purchase warehouse space and e-commerce sales have boomed since the start of the COVID-19 pandemic. At the same time, a huge increase in sales, coupled with a labor shortage, has squeezed supply chains and illuminated ongoing challenges. With a greater need to keep up inventory, warehouse space is becoming critical to support it. Real estate assets are also helping retailers with a lot of cash on hand, according to the WSJ.
The high demand for industrial space is increasing property values, which have grown 39% over the last 12 months, outpacing the 20% growth for commercial real estate overall, according to recent data from Green Street.