Warehouse demand at unprecedented levels in cities such as Savannah, real estate firm JLL says


July 2, 2021: According to a new report, as retailers beef up e-commerce operations and invest in delivery for customers even faster, the appetite for warehouse space is rocketing higher.

This year, demand among mass merchandisers for logistics facilities to store inventory and pack and ship online orders will be more than ever, said commercial real estate services firm JLL.

JLL has been tracking pent-up demand among big-box and value retailers, which include Walmart, Target, Big Lots, TJX, and Costco, all of which are vying for warehouse space. Some of these companies are playing catch up to Amazon, which for years has been gobbling up warehouses, big and small, in central locations across the country. More recently, buying and leasing activity has spread into densely populated areas, which include New York City.

“We’ve been on a long-term journey of shifting consumer behavior from buying in stores to online,” Craig Meyer, president of JLL’s Americas industrial division, said in an interview. “That’s the existential driver for demand in the U.S.”

A few key markets in the U.S. where businesses that include third-party logistics providers such as UPS and FedEx face much stiffer competition over warehouse space.

Demand has skyrocketed in Columbus, Ohio, JLL found, a market where it says around half of the population of the country is within a one-day drive. Industrial real estate demand in Columbus is forecast by JLL to increase 61% in 2021 from 2020, after a jump of 13.7% the prior year.

Meantime, as ports along the coast of Southern California experience extensive backlogs, inquiries for warehouse facilities are reaching unprecedented levels in Savannah, Georgia, JLL said.

The demand for industrial real estate in the Savannah area has increased by almost 10 million square feet over the past year, the report said.

According to the Georgia Ports Authority, container volume coming into the port of Savannah increased 28% from 2016 through 2020. Recently, the GPA board approved to fund to expand capacity at the pier to handle additional containers.

“Cargo is shifting towards the East Coast. And that’s been going on for a while, but again was exacerbated by Covid,” Meyer said.

“There are a lot of companies looking to get there as a staging point, now, as come off the boat,” Meyer added.

Across the country, taking rents, which are the base rents that landlords and tenants settle on, are increasing faster than asking rents, according to separate data from the real estate firm CBRE. This is one more sign of a hot market. Industrial taking rents increase 9.7% in the first five months of 2021, compared with the same period a year earlier, CBRE found. Asking rents increase just 7.1% over the same timeframe.

“We’ve seen gigantic leases, high-density leases, signed in Brooklyn, Queens, and markets around New York City,” Meyer said.

“And what’s remarkable about those is there are rents that are equal to office building rents. Because being close to that cluster, for that last mile, is so critical,” Meyer added.

Editor's Choice

Posts You Might Like

Leave us a message


Fill the form our team will contact you

Advertise with us

Fill the form our team will contact you​