Multistory warehouses are beginning to pop up in densely populated U.S. metros to distribute e-commerce orders, but conditions for developing the structures still aren’t as ideal in the U.S. as in Asia and Europe, according to a new report from CBRE.
CBRE’s analysis found that markets including New York City, San Francisco, Miami, Chicago, Los Angeles and Seattle offer the most favorable conditions for development of multistory warehouses. Those criteria include a large, densely packed population, high industrial land prices and rents and significant penetration of e-commerce use among residents.
The CBRE report pinpoints three multistory warehouses currently under development in New York City’s Brooklyn and Bronx markets. Developers including Prologis, DHP Goldman Sachs, Innovo Property Group and Square Mile Capital are making major investments in these outer boroughs in an effort to bolster the industrial market and attract last-mile tenants.
“With a falling 3.7 percent vacancy rate, industrial/warehouse space comes at a premium in the New York City market,” said Brad Cohen of CBRE. “In such a densely packed market, the available land and existing industrial product in the outer boroughs of New York City make it ideal for the construction of multistory warehouse facilities, which can provide ‘last-mile’ delivery options for the rapidly growing e-commerce industry.”
The multistory warehouse trend is more advanced in parts of Asia and Europe, where populations are more densely packed and land prices are higher. While U.S. land prices for industrial development have more than doubled in the past five years to roughly $30 per buildable square foot, land prices and rents in cities such as Hong Kong, Tokyo and London remain twice to three times more expensive than in U.S. cities.
To read the full report, click here.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2017 revenue). The company has more than 80,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
