E-Commerce Fueling Demand for Huge Spec Warehouses: Augusto Beato

September 20, 2018 – – Warehousing firms should continue targeting e-commerce businesses by offering huge spec warehouses, shares Augusto Beato of Ice Break Shipping.

As an example, Beato pointed out that Houston-based Archway Properties and Ridgeline Property Group of Atlanta have recently teamed up to build a 685,400-square-foot speculative warehouse northeast of Houston to meet growing demand from e-commerce tenants.

Beato, who is also the CEO of Portland SEO, added that the trend is highlighted by a CBRE report that e-commerce companies are leasing warehouses larger than 750,000 square feet.

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Beato based his comment on a CBRE report on the largest Industrial and Logistics leases completed in the U.S. in the first half of this year, which revealed that 56 out of 100 biggest leases for warehouse space were for e-commerce companies.

Of those 100 leases, 30 were for warehouses larger than 750,000 square feet, reflecting e-commerce users’ preference for expansive facilities with high ceiling heights and, in many cases, modern specifications for automation and rapid movement of massive inventories.

Of the 56 e-commerce leasing deals, 23 were by online sellers, and 33 were by and third-party-logistics companies (3PLs), which predominantly handle distribution for goods purchased online.

The leases represented about 67 million square feet of space, with 40 million square footage being leased for e-commerce use. The lease agreements ranged in size from 417,000 to 2 million square feet.

The balance of the first half’s largest leases was signed by manufacturers (14 leases), food and beverage providers (11), retailers (seven), technology companies (four) and an “other” catch-all category (eight).

CBRE Group Inc., a large Los Angeles commercial real estate services and investment company, noted that the strength of leasing to 3PLs shows that companies are striving to create the most flexible and nimble distribution networks possible.

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