As e-commerce has become the preferred shopping method, warehouses size has increased to accommodate the larger volume needed to ship directly to consumers. In fact these warehouses require two to three times more space than traditional warehouses due to the increased inventory which requires more labor and automation.
Construction of industrial facilities measuring 1 million sq. ft. or more is strongest in large industrial markets that benefit from the booming e-commerce trend, according to a recent CBRE report.
Since 2010, nearly 90 million sq. ft. of these mega facilities have been completed in the top 10 markets. An additional 31.6 million sq. ft., with 60% pre-commitments, is under construction and scheduled for delivery by year-end 2018.
“The rapid pace of mega-warehouse construction is likely to continue for a while, even if the economy slows, because there are no signs that the transition from mall and store shopping to online purchasing is slowing, said David Egan, CBRE’s head of industrial and logistics research in the Americas, as reported by Hugh R. Morley at JOC.com
“Generally speaking, the supply chain is getting much deeper, more buildings, more locations, trying to get greater access to the consumer base in a shorter period of time,” he said. “What that has meant is that we have a need for more big bulk regional facilities.”