- Mega big box leases continue to dominate the industrial market, with nearly 50% of the top 100 leases in 2024 exceeding 1 MSF.
- The average size of these top leases dropped slightly to 968 KSF in 2024, down from 987 KSF in 2023.
- Dallas-Fort Worth, Inland Empire, and Pennsylvania’s I-78/81 corridor accounted for nearly 40% of the total square footage in the top 100 leases.
- Traditional retailers and wholesalers accounted for a larger share of tenants, while third-party logistics operators saw a slight pullback in leasing activity.
In 2024, the US industrial leasing market continued to see trending ‘mega-big-box’ deals, per GlobeSt. In fact, according to a CBRE industrial leasing report, nearly half of the top 100 leases last year were for spaces larger than 1 MSF.
By The Numbers
The industrial market remains heavily influenced by large-scale distribution leases. In 2024, nearly half of the top 100 leases signed were for properties exceeding 1 MSF. This reflects the continued growth of e-commerce, which requires vast storage space to distribute goods efficiently.
Despite this, the average size of the top 100 industrial leases dropped slightly to 968 KSF, compared to 987 KSF in 2023. While the pullback isn’t substantial, it signals a slight shift in tenant needs and market conditions as businesses reassess their space requirements following the pandemic.
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Tenant Mix Shifts
Tenant composition within the top 100 leases also saw some notable shifts. Traditional retailers and wholesalers were more active in 2024, signing 38 leases compared to 30 in 2023. This rise suggests that traditional retail is adapting to new logistics needs alongside e-commerce operators.
Third-party logistics companies, which had been significant players in past years, saw a slight dip in leasing activity, with 28 deals signed in 2024, down one from the previous year. While the food & beverage, auto, and building materials sectors saw fewer leases in 2024, other industries like e-commerce and wholesale are taking up more space.
Leading Industrial Leasing Metros
Most industrial leasing activity in 2024 was concentrated in just a few key markets. Dallas-Fort Worth led the way, with 13 deals totaling 14.3 MSF, accounting for a staggering 43% of the total leased space in the top 100.
The Inland Empire in California followed closely, with 13 leases totaling 12.9 MSF, while the I-78/81 corridor in Pennsylvania accounted for 12 leases, totaling 11.4 MSF.
These regions continue to dominate the industrial sector due to their strategic locations, robust infrastructure, and proximity to major transportation hubs.
Other major industrial markets, such as Atlanta, Memphis, and Chicago, also saw considerable leasing activity. Atlanta signed eight leases totaling 7.3 MSF, while Memphis secured seven leases totaling 5.9 MSF. Chicago, a longstanding industrial hub, signed five leases totaling 5.2 MSF.
Emerging Markets
While the top leasing markets continued to attract the majority of deals, emerging markets saw less activity in 2024.
However, CBRE notes that these areas may present growth opportunities in the near future. With more new construction coming online, these markets could attract increased leasing as businesses evaluate their long-term distribution strategies.
Looking Ahead
The demand for industrial space remains strong, and new developments are expected to meet that demand as businesses look to consolidate operations into larger, more efficient buildings.
First-generation facilities are expected to make up a greater share of the top 100 industrial leases in the coming year. This shift will likely lead to further market consolidation, with more businesses prioritizing newer, more efficient spaces that allow for greater scalability and operational flexibility.
