The demand for big warehouse space jumped by 51% in the first six months of this year, according to a new report issued by Colliers International Group Inc.
That document titled the Big-Box Market Report notes that the use of new warehouse space has worked out to around 79.8 million square feet as of this summer, up from 52.8 million during the same time last year.
Continues the report: “A total of 96.5 million square feet of new supply was added to the market, and an additional 10.7 million square feet of big-box space remains under construction.”
That 96.5 million square feet of warehouse space is, for now, down from the 154 million square feet completed last year, with projects currently in the works certain to increase the overall completion numbers by the end of this year.
The new warehouse projects have largely occurred in the Midwest, as well as Texas and California.
But the Phoenix metro area has proven a vibrant hub of warehouse construction, with projects currently under construction “moving along as quickly as supply allows.”
A mid-year slowdown in southern Arizona warehouse construction, continues the report, was largely due to the decreased availability of construction materials.
According to Don MacWilliam, Collier’s executive vice president in metro Phoenix, one of the primary reasons for new warehouse growth in the area has been the opening up of the Loop 202 freeway as well as the Loop 303 corridor, an attraction to “large corporate users taking advantage of excellent freeway access and solid market dynamics.”
Nationally, online retail giant Amazon is proving the biggest builder and user of new warehouse space.
The company, says the report, “transacted more than 26.9 million square feet during the first half of 2020.” That number is higher than what Amazon completed in all of 2018 and 2019.
“Over the next three years, Amazon is expected to occupy an additional 161 million square feet,” adds the report.
While other sectors of the construction industry have been negatively impacted by the Covid 19 economy, the report predicts that new supply chain strategies will keep the momentum going for “industrial space and increased demand for distribution hubs.”
By Garry Boulard
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