3PLs dominating warehouse leasing market

A pair of reports published this week from leading industrial real estate firms said the 3PL sector has been the most active in bidding and procuring new space.

The world’s largest commercial real estate services firm, CBRE Group, Inc. (NYSE: CBRE), said 3PLs accounted for more signed leases of 1-million-square-foot-plus properties than any other industrial vertical during the first half of this year.

Third-party logistics providers were occupiers of 38 of the top 100 industrial leases, accounting for 28.9 million square feet of space. The group signed just 28 leases totaling 20.6 million square feet in the 2024 first half.

The report said 3PLs were able to take a larger share of the mega lease market as many retailers and manufacturers are now outsourcing warehousing and distribution operations due to higher rents and operating costs.

Further, activity among e-commerce tenants plummeted, with the group logging a 77% year-over-year decline in lease count (to just 7 new leases) and total square footage leased dropping 64% y/y (to 4.7 million). “The drop-off reflects broader restructuring across the e-commerce sector, with many firms continuing to scale back after a period of rapid growth,” the report said.

An annual demand analysis from JLL, Inc. (NYSE: JLL) showed 3PL, logistics and distribution tenants now account for the largest share of the pipeline. Demand from the group was up 12.8% y/y to 185.4 million square feet. (The study is a snapshot in time providing “the most thorough preview of potential future leasing decisions.”)

Conversely, the report showed traditional retailers reduced their expected space requirements by 16.7% y/y.

“These opposing trends highlight how trade policy uncertainties and rising costs are fundamentally reshaping industrial real estate dynamics, with retailers becoming more cautious while logistics providers actively position themselves against supply chain disruptions,” the JLL repot said.

Prospective logistics-oriented tenants now account for 15.4% of total demand through 2026. The increase among the group is partly due to an inventory pull forward ahead of a changing trade landscape.

JLL noted rising interest from manufacturers, which are attempting to move production closer to the end consumer. It also said that interest in build-to-suit properties has increased more than 117% since 2018, “reflecting a strategic move towards long-term cost control, operational stability, and asset appreciation in an evolving industrial real estate landscape.”

Overall, JLL said demand was down 10.9% y/y as macroeconomic uncertainty has delayed decision making. Tenants are now active in the market for 11 months on average compared to the pandemic when they were making decisions in just 3.5 months.

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CBRE, too, noted overall demand weakness. Total mega warehouse leasing activity fell by more than half in the 2025 first half. Signed lease count fell 58% y/y (to 13 leases) with total new space leased dropping 55% (to 15.6 million square feet).

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