CBRE analysis finds densely populated markets such as Seattle, San Francisco, NYC most suitable venues for multistory warehouses to facilitate e-commerce distribution
Seattle, WA (October 25, 2018) – Multistory warehouses are beginning to pop up in densely populated U.S. metros like the Puget Sound region 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 Seattle, San Francisco, New York City, Miami, Chicago and Los Angeles 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 five multistory warehouses currently under development in the U.S.: Three in New York City, one in San Francisco and one recently completed in Seattle.
“As a population, we have increasingly high expectations of almost immediate delivery of e-commerce items,” said Andrew Hitchcock, Senior Vice President in CBRE’s Seattle office. “Densely populated cities with high land values will continue to see a fundamental shift towards multistory warehouses in an effort to develop modern facilities as close to the population as possible.”
The multistory warehouse trend is more advanced in parts of Asia and Europe, where populations are more densely packed and land prices are higher. U.S. land prices for industrial development have more than doubled in the past five years to roughly $30 per buildable square foot. Yet 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.
“Multistory warehouses are an emerging phenomenon in the U.S., but they might pencil out only in the densest neighborhoods and cities,” said David Egan, CBRE’s Global Head of Industrial & Logistics Research. “We might need to see some additional adaptations that are common in Asia and Europe, such as smaller delivery trucks, which allow for tighter ramps and, in turn, smaller building footprints.”
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.