WSJ: Warehouse leasing tumbled at the end of 2022

A man explores a tower of cubes with the word Risk. Search and correction of errors and failures. Risk management, cost assessment, and business and investment safety. Strengthen business resilience

06/01/2023

THE WALL STREET JOURNAL reports:

The U.S. warehousing market is retrenching heading into 2023, a turnaround from the pandemic-driven boom in industrial real-estate demand as companies slow down decisions on new storage and distribution space amid fears of a recession.

Companies leased 132 million square feet of industrial space across the U.S. in the fourth quarter, down 28.2% from the third quarter, according to a new report from commercial real-estate services firm Cushman & Wakefield. That was the second straight quarter-to-quarter drop in leasing.

After “the extreme acceleration we saw the past couple years, there’s just a natural kind of cooling right now,” said Carolyn Salzer, Americas head of logistics and industrial research for Cushman & Wakefield.

The pullback follows several years of frenetic expansion in warehousing construction and leasing as a surge in online shopping driven by the Covid-19 pandemic pushed companies to snatch up space to get goods closer to consumers. Retailers have been pulling back on their inventory restocking since the middle of last year, however, and companies that were once scrambling for space are rethinking logistics expansion.

Amazon.com Inc. doubled the size of its fulfillment network in 24 months as its business surged. But the e-commerce giant last year started paring back growth in its warehousing operations and began to sublease some of its space as e-commerce growth slowed. Amazon on Wednesday said it is planning to lay off more than 18,000 employees, mostly in its corporate ranks, as it seeks to cut costs as online sales growth has retreated…

The full post is here.