For First Year on Record 3PLs Surpass Retailers in Big Warehouse Leases
For the first year on record, third-party logistics providers in 2022 leased more big-box warehouse space in North America than any other sector, according to a CBRE report published last week.
3PLs accounted for 41% of all lease transactions at traditional warehouses and distribution centers with at least 200,000 square feet in 2022. Retailers and wholesalers, the previous leader, came in second at 31.5% of leasing share.
Growing demand for 3PL services contributed to a strong year for big-box leasing activity overall. Direct vacancy rates matched 2021’s record low of 3.3%, driving a 23% jump in first-year base rents YoY.
3PL industrial leasing activity leapfrogs retail, wholesale:
Below are the share percentages of new leases and renewals in North America with at least 200,000 square feet, by occupier type for both 2021 and 2022.
In 2021, 3PLs occupied 32.2% of warehouse space. In 2022, they occupied 40.8%.
In 2021, general retail and wholesale occupied 35.8%. In 2022, they occupied 31.5%.
The next two categories are food and beverage and e-commerce only which combined added up to 15% in 2022. Down from 20% in 2021.
Instead of returning to in-house fulfillment as supply chains normalize after the pandemic, “companies have since realized that 3PLs can play a vital role in their business models, and demand is stronger than ever.” This is according to John Morris (president of property group CBRE’s industrial and logistics business in the Americas), said in a statement.
“Occupiers will place greater focus on inventory management and supply-chain resilience this year. This likely will result in demand being driven less by the need for safety stock and more by the need to store inventory closer to the point of sale. Mid-size and big-box facilities should be the beneficiaries, as users expand hub-and-spoke fulfillment models.” - John Morris
Nucleus sees this as a part of the inevitable trend toward Supply Chain as a Service. Where almost all large companies outsource their supply chain activities to specialist service providers.