Mega big box deals have dominated, with the number of leases for one million square feet representing nearly half of the top 100 leases in 2024. The growth was driven by record online sales, according to a CBRE industrial leasing report.
However, the average size of the top 100 industrial leases fell slightly last year to 968,000 square feet from 987,000 square feet in 2023, CBRE said in the report. Of the biggest deals, 40 were renewals, an increase of 10 from 2023.
CBRE also noted a less diverse mix of tenants among the top 100 compared with 2023. Traditional retailers and wholesalers signed 38 leases, compared with 30 in 2023, while third-party logistics operators signed 28, down one from 2023. The food & beverage, auto and building materials sectors all made up a smaller share in 2024 with nine, five and three leases signed in each sector. E-commerce operators signed 14 leases, manufacturing signed two and medical signed one.
Dallas-Fort Worth, Inland Empire and the I-78/81 corridor in Pennsylvania accounted for nearly 40% of the top 100 leases in 2024, while emerging markets attracted less leasing activity, said CBRE. Dallas-Fort Worth had 13 deals totaling 14.3 million square feet, representing 43% of the total. The Inland Empire had 13 totaling 12.9 million square feet and Pennsylvania had 12 leases for 11.4 million square feet.
Other leading markets for industrial leasing include Atlanta with eight leases totaling 7.3 million square feet, Memphis with seven leases totaling 5.9 million square feet, and Chicago with five leases for 5.2 million square feet. Philadelphia attracted five leases totaling 4.7 million square feet, Phoenix logged four deals for 4.6 million square feet, and California’s Central Valley struck four deals amounting to 3.8 million square feet.
The report indicated demand for mega distribution centers should stabilize in 2025, as occupiers take stock of their inventory needs five years after the pandemic.
“Robust construction will provide ample opportunity for companies to move out of older, smaller facilities and consolidate their operations into new, larger Class A buildings,” CBRE said. “As a result, first-generation facilities are expected to make up a greater share of the top 100 industrial leases in 2025.”