Memphis Named a Leading Market in U.S. For Large Industrial Transactions In 2020

Driven by pandemic-related demand, e-commerce, retail, and wholesale led industrial large-lease activity last year; U.S. Sees Record Number of 1M SF Industrial Transactions in 2020

 

Memphis, TN – January 28, 2021 – 2020 proved to be a record year for large industrial transactions, driven by significant growth in online shopping and retailers keeping more inventory on hand.  Across the country, 48 leases of 1-million-sq.-ft. or larger were recorded, a significant increase from 29 leases of this size the year prior, according to CBRE. Memphis was one of the leading markets in the U.S. for large industrial transactions with 2.8 million total sq. ft. across three deals in 2020.

 

“Memphis continues to be a top market for mega box industrial deals. This is partially credited to the organic expansion of the high-quality credit tenant base already in Memphis,” said Patrick Walton, senior vice president at CBRE in Memphis. “The Midsouth appeals to a wide range of industrial investors and tenants due to the region being strategically located in the center of the country with five Class I railroads, FedEx’s world hub, and a robust road infrastructure.”

 

The average transaction size of the top 100 industrial deals in the U.S. increased last year to 1,038,183 sq. ft., a significant jump over 2019’s average of 887,594 sq. ft. In total, the top 100  transactions accounted for 103.8 million square feet, representing a year-over-year increase of 17%.

 

E-commerce occupiers, companies that exclusively ship directly to consumers, led the country with 35 transactions totaling 37.3 million sq. ft.—nearly double the 18 signed in 2019.  General retailers and wholesalers that distribute both to brick-and-mortar stores and directly to consumers accounted for 32 of the top 100 transactions, totaling 35 million sq. ft.

 

“Industrial continues to be the most in-demand asset class in commercial real estate,” said John Morris, executive managing director and leader of CBRE’s Americas Industrial & Logistics business. “As more consumers shopped online during the pandemic, and as retailers stocked more inventory to meet demand and avoid shortfalls, large industrial transactions hit record highs in 2020. With the fourth quarter recording the largest single-quarter for industrial net absorption on record, we expect strong demand to continue in the new year.”

 

Breaking it down by market, Atlanta had the highest number of large transactions with 13, more than doubling its 2019 total of six. Dallas, the Inland Empire and Pennsylvania’s I-78/81 corridor each had 11 large transactions.

Leading Markets	Number of Transactions	Transacted MSF
Atlanta	13	12.8
Dallas-Ft. Worth	11	10.7
Inland Empire	11	10.8
PA - 1-78/81 Corridor	11	12.9
Chicago	8	7.8
Indianapolis	5	4.9
Philadelphia	5	8.1
Columbus	4	4.2
Memphis	3	2.8
Phoenix	3	2.9

“As the population in the Southeast continues to grow, so will Atlanta’s role as a major distribution hub for the region,” said James Breeze, Global Head of Industrial & Logistics Research for CBRE.

 

“It’s also interesting to note the growth in the I-78/81 corridor, which accounted for the most square footage of the top 100 deals in 2020 at 12.9 million square feet. As one of the last industrial markets in the Northeast with available land for development, demand will only continue to grow, as will its prominence as a large distribution hub,” he added. 

 

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