(February 21, 2025) -- A report recently issued by Dallas-based industrial real estate firm CBRE stated that the number of the largest industrial and logistics leases inked in 2024, for 1 million square-feet (MSF) or more, saw a significant annual gain.
The report, entitled, “Mega Big-Box Signings Dominate 2024 Top 100 Industrial Leases,” analyzed the largest 100 largest logistics and industrial leases for the year.
CBRE’s key findings included:
- occupiers signed leases for 49 mega distribution leases in 2024, topping the 43 signed in 2023 (2023 was the first year in which there was a decline in the number of mega distribution center leases—that saw sharp gains during the pandemic, topping out at 61 in 2022);
- the average size of the largest mega distribution center leases dipped to 968,000 SF, just short of 2023’s 987,000 SF; and
- 40 of the largest 100 leases were renewals, coming in ahead of 2023’s 30.
Looking at mega distribution center tenants by vertical, CBRE called the mix involved “less than diverse,” with traditional retailers/wholesalers accounting for 38 leases, up from 30 in in 2023, while 3PLs were down one lease, to 28. And it added that the food & beverage (9), auto (5) and building (3) markets, respectively, saw smaller shares—accounting for fewer top 100 leases in 2024—on an annual basis
Taking a closer look at 3PL leases, CBRE explained that despite the decline in 2024, the 28 signed leases nearly doubled up the 15 signed in 2020 and the 18 signed in 2022, which the firm said highlights how large industrial users continue to rely on 3PLs to manage their logistics operations.
James Breeze, CBRE Vice President, Global Industrial and Retail Research, told LM that CBRE expects 3PL leasing activity to increase in 2025.
“More companies are outsourcing distribution capabilities as a way to mitigate risk in an uncertain supply chain environment and focus capital on product development,” said Breeze.
The highest amount of 2024 leasing activity was in Dallas-Fort Worth, with 14 leases and 14.3 MSF. Rounding out the top three were the Inland Empire, with 13 leases and 12.9 MSF, and the PA I-78/81 Corridor, with 12 leases and 11.4 MSF.
Aside from strong online sales, Breeze said there are various factors driving the increase in mega distribution leasing activity.
“The large amount of newly constructed available mega distribution space has given companies the opportunity to consolidate out of older facilities into new ones with more modern amenities,” he said. “We believe it will carry into 2025. While construction completions will be much lower this year, there is still plentiful available first-generation space. However, we do see a shortage of this space coming in 2026 as we expect new construction will further decline.”
When asked if there is a specific reason for the decline in the average size of the 100 largest industrial leases, Breeze said there was no major reason, explaining that there were a few large build-to-suit transactions in 2023 that made the average slightly higher than 2024.
John Morris, president of Americas Industrial & Logistics at CBRE, said that the rise in lease renewals underscores a strategic shift in the market,
“Companies are more frequently prioritizing stability and efficiency by extending their current leases in established logistics hubs,” said Morris.