Internet giants fuel warehouse demand as industrial land prices surge

Business


John Tlumacki | The Boston Globe | Getty Images

A worker pulls carts full of customer orders along the floor inside the million-square foot Amazon distribution warehouse that opened last fall in Fall River, MA.

Land fit for future fulfillment centers for the likes of Amazon and Walmart saw huge spikes in prices last year, according to real estate services firm CBRE.

In a trend largely stemming from the growth of e-commerce players across the U.S., some plots of land now cost twice the amount they did a year ago, the group found. This is especially true in major markets, including Atlanta and Houston.

In surveying 10 U.S. markets, CBRE found the average price for “large industrial parcels” (50 to 100 acres) now sits at more than $100,000 per acre, up from about $50,000 a year ago.

Industrial land plots of five to 10 acres, which typically house infill distribution centers for completing “last-mile” deliveries, watched their prices soar to more than $250,000 per acre by the end of 2017, up from roughly $200,000 a year ago, according to CBRE. Located in more bustling metropolitan settings, these warehouses must help retailers serve consumers closer to their homes.

To be sure, industry experts say that despite an uptick in construction of late, there’s still a long way to go before supply aligns with demand.



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