CBRE Analysis Finds Densely Populated Markets Such As NYC, San Francisco, Seattle Most Suitable Venues For Multistory Warehouses To Facilitate E-Commerce Distribution
Los Angeles - Multistory warehouses are beginning to pop up in densely populated U.S. metros 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 New York City, San Francisco, Miami, Chicago, Los Angeles and Seattle 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.
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.”