2020 proved to be a record year for large industrial transactions, driven by significant growth in online shopping and retailers keeping more inventory on hand. Across the country, 48 leases of 1 million square feet or larger were recorded, a significant increase from 29 leases of this size the year prior, according to CBRE.
The average transaction size of the top 100 industrial deals in the U.S. increased last year to 1,038,183 square feet, a significant jump over 2019’s average of 887,594 square feet. In total, the top 100 transactions accounted for 103.8 million square feet, representing a year-over-year increase of 17%.
E-commerce occupiers, companies that exclusively ship directly to consumers, led the country with 35 transactions totaling 37.3 million square feet —nearly double the 18 signed in 2019. General retailers and wholesalers that distribute both to brick-and-mortar stores and directly to consumers accounted for 32 of the top 100 transactions, totaling 35 million square feet.
“Industrial continues to be the most in-demand asset class in commercial real estate,” said John Morris, executive managing director and leader of CBRE’s Americas Industrial & Logistics business. “As more consumers shopped online during the pandemic, and as retailers stocked more inventory to meet demand and avoid shortfalls, large industrial transactions hit record highs in 2020. With the fourth quarter recording the largest single-quarter for industrial net absorption on record, we expect strong demand to continue in the new year.”
Breaking it down by market, Phoenix, along with Memphis, had 3 large transactions.
During the last quarter of 2020, Greater Phoenix was engaged with a staggering 50 companies tied to ecommerce and specialized manufacturing industries that were looking for large spaces and with 20 of them needing 500,000 square feet or more,” said Phoenix-based Senior Vice President Jackie Orcutt“Given Arizona’s burgeoning population growth, quality of life and relative affordability as compared with its coastal neighbor, Greater Phoenix has truly turned into a prime strategic location for technology and manufacturing companies.”
She added, “Arizona has located more than 12,500 jobs in the past 18 months tied to specialized manufacturing. Much of this is in large part due to our outstanding supply chain program at ASU, among others. All this is to say, the greater Phoenix area has become highly competitive, which is only going to boost demand for large industrial space in the region.”