The explosive growth of e-commerce has created a once-in-a-generation investment opportunity in logistics real estate. As online shopping becomes increasingly ubiquitous, the demand for efficient warehousing and distribution centers has reached unprecedented levels.
E-Commerce and Logistics: A Symbiotic Relationship
Recent data from CBRE, the global commercial real estate services firm, reveals the dramatic expansion of logistics facilities driven by e-commerce. In 2018, e-commerce and logistics companies accounted for 61 of the 100 largest industrial and logistics leases in the U.S., covering a staggering 61.5 million square feet - equivalent to over 1,000 football fields.
This represents a 40% increase from 2017, when these companies signed 52 leases totaling 43.2 million square feet. The rapid growth demonstrates how e-commerce continues to transform the logistics real estate landscape.
"These numbers show that despite concerns about e-commerce growth potentially reaching maturity, online retailers still exert strong momentum in the U.S. warehouse leasing market," said David Egan, CBRE's Global Head of Industrial & Logistics Research.
The Scale Advantage: Bigger Is Better
The CBRE report also highlights a trend toward larger industrial leases. The total square footage of the top 100 industrial leases in 2018 grew by 19% compared to 2017, reflecting companies' increasing focus on operational scale.
This "bigger is better" approach allows companies to achieve greater storage capacity, higher efficiency, and stronger competitive positioning. In e-commerce particularly, where fast order processing and delivery are critical, large warehouses provide a strategic advantage.
Logistics Hubs: The New Battleground
The largest industrial leases in 2018 were concentrated in key logistics hubs across 32 U.S. markets. Notable hotspots included:
- California's Inland Empire (20 leases)
- Pennsylvania's I-78/I-81 corridor (11 leases)
- Dallas-Fort Worth (10 leases)
- Atlanta (9 leases)
- Chicago (5 leases)
These locations offer the essential ingredients for logistics success: robust transportation networks, skilled workforces, and high-quality facilities.
"When a region offers transportation access, qualified labor, and state-of-the-art real estate, this activity becomes self-reinforcing," explained Chris Zubel, CBRE's Americas Industrial & Logistics Investor Leader.
The Rise of Third-Party Logistics Providers
Another significant trend is the growing role of third-party logistics (3PL) providers in supporting e-commerce operations. CBRE research found that 40% of 3PL companies serve e-commerce clients.
"This confirms our view that online retail continues to evolve and influence demand for logistics space," said Matt Walaszek, CBRE Senior Research Analyst for Industrial & Logistics. "E-commerce users' square footage grew 42% year-over-year."
Supply Constraints on the West Coast
While demand remains strong in western states, limited availability of suitable space is creating challenges. Of 33 major West Coast transactions in 2018, only six were renewals - the rest represented new leases or user sales.
"West Coast markets continue to generate tremendous demand," noted Walaszek. "However, insufficient availability of space for operators looking to expand is constraining leasing activity."
The Future of Logistics Real Estate
The sector is evolving toward smarter, greener, and more global operations:
- Smart warehouses: Incorporating IoT, AI, and automation to optimize operations
- Sustainable facilities: Implementing energy-efficient designs and renewable power
- Global networks: Supporting cross-border e-commerce with international distribution centers
As e-commerce continues to reshape consumer behavior and supply chains, logistics real estate remains a compelling investment opportunity with strong fundamentals and growth potential.