• I hired Ward Richmond because I needed a fast-paced individual who specializes in solutions for 3PLs and could deliver a comprehensive solution that maximized site value and enabled me to close the deal. His market intelligence and relentless effort on this project undoubtedly helped us secure the business with this new, Fortune 500 customer.

    BRETT M. MEARS President - Palmer Logistics
  • Ward Richmond understands the 3PL business. We rely on Ward to help solve our customers’ supply chain opportunities and provide them with logistics solutions that fit their needs.

    BRYAN KELLER Chief Executive Officer – Keller Logistics
  • Ward has consistently demonstrated a high level of customer service, a strong work ethic, and comprehensive understanding of transportation & logistics-related real estate.

    ED Brickley Fund Manager, Realterm Logistics
  • Ward and his team have consistently delivered a high level of customer service over the course of several years and hundreds of transactions by working closely with our team in an effort to assist us with developing and implementing creative real estate solutions.

    Frank Mazzone RM, Real Estate, TFI International
  • Positive attitude and customer-centered approach made for a great working relationship.

    Joe Fidalgo MD, N America, Marine Harvest
  • Ward and his team have consistently exceeded our expectations while working closely with our Properties Team to execute our real estate strategies and achieve our stated objectives.

    MAYNARD F. SKARKA COO, Yrc Freight
  • The Colliers team worked quickly and efficiently to leverage their local market relationships to find KW multiple short term, flexible space solutions in an expedient and professional manner.

    DEAN DOKGO Vice President, KW International
  • Ward has acted as our strategic real estate partner for several years having assisted our team during our rapid growth by utilizing strong relationships and unparalleled market knowledge to source off-market opportunities for property expansion needs.

    TAYLOR WHITE CEO, Performance POP

Ward Richmond


Corporate real estate solutions

Text Me Right Now to Generate Massive Value! 214-336-5757
  • Loading stock data...

Food and Beverage Industry Continues to Grow but 3PLs Dominate Activity in First Half of 2019

Food and Beverage Industry Continues to Grow but 3PLs Dominate Activity in First Half of 2019

July 23, 2019 Market Reports 0 Comments 106 views

Food and Beverage Industry Continues to Grow but 3PLs Dominate Activity in First Half of 2019

By James Breeze

Occupier activity across the Unites States continues to be robust, but it is not on par with the same time a year ago in bulk industrial space (100,000 square feet and larger). In the first half of 2019, 1,142 industrial (warehouse, manufacturing, flex) new leases, renewals and user sales were transacted, totaling 266.7 million square feet, a 12.6% decline from the first half of 2018. The average size of a bulk transaction was 234,000 square feet, much lower than the 261,000-square-foot average this time last year.

While e-commerce-only occupiers, like Amazon, remain on the top of minds of industrial landlords, they only made up 10% of the transactions signed in the past 12 months — in line with the percentage of total retail sales e-commerce accounted for. The top occupier remains third-party logistics and packaging companies (3PLs), signing 67 million square feet of transactions, 25% of the total transactions signed. 3PLs, who offer logistics and warehousing services for retailers and wholesalers who choose to outsource, remain the top occupier of industrial space because of the sheer volume of companies who service every industry in the business. While 3PLs were the top overall occupier, the food, beverage and pet supplier industry grew the most compared with the previous year, at a rate of 6.5% and they were the only occupier type to post a growth in year-over-year transactions.

E-commerce-only occupiers continue to require buildings much larger than other occupier types, as the average e-commerce transaction the past year totaled 422,903 square feet, nearly double the overall average transaction size for a bulk industrial building but much lower than the 510,840-square-foot average in the first half of 2018 because of a decline in transactions larger than one million square feet. For the 19th consecutive quarter, Amazon was the top e-commerce and overall occupier of industrial space, with a year-to-date total of 9.3 million square feet.

The Midwest beat out the Southeast as the top region of choice for bulk industrial occupiers, with 32% of the bulk transactions signed in the region. Both industrial and manufacturing occupiers continue to move into the market in droves because of the region’s pro-business climate and significant logistics advantages. The Southeast region is still doing well as occupiers move into the region to support the growing population. At the time of this report, more than 70 million people lived in the Southeast region, and this is expected to grow by a nation-leading 7% over the next five years. The West region finished in third thanks to continued strong demand in the Inland Empire, which remains one of the top markets in the country for bulk leasing activity.

Transaction volume for bulk industrial space will remain robust over the next 12 months because of occupiers’ increasing need for both regional and final-mile bulk distribution centers. While 3PL and retail-related distribution volume will remain robust, look for the strong growth that was showcased in the food and beverage industry to continue, as many of these occupiers are looking to expand and modernize their distribution and manufacturing networks. Population growth will keep occupiers in all industries looking at space in the Southern and Western portions of the U.S., while improvements and expansions of inland and coastal logistics hubs as well as strong domestic manufacturing in the Northeast and Midwest will keep demand strong in these regions for the foreseeable future.

Company Type Description:

    • Construction, Improvement and Home Repair – Warehousing and distribution of materials used in residential and commercial construction, improvements and repair, could contain some e-commerce components.
    • Data Centers, Tech and R&D – The use of industrial space for data centers and non-pharmaceutical R&D purposes.
    • E-Commerce Only – Warehousing and distribution of product that is ordered online and shipped directly to the end consumer only.
    • Food, Beverage and Pet Supply – Manufacturing, warehousing and/or distribution of food and beverage related products. Could contain some e-commerce or manufacturing components.
    • Furniture and Appliances – Warehousing and distribution of retail and/or wholesale furniture and appliance products. Could contain some e-commerce and or manufacturing components.
    • General Retail and Wholesale – The warehousing and distribution or retail and/or wholesale products not listed in any of the other categories. Could contain some e-commerce or manufacturing components.
    • Manufacturing – Industrial space used for manufacturing and/or storage of raw materials and equipment used in the manufacturing of non-automobile related products.
    • Motor Vehicles, Tires and Parts – The warehousing, manufacturing and/or distribution of motor vehicles, tires and related parts and materials.
    • Third Party Logistics and Packaging – Third party logistics (3PL) and packaging of a wide variety of products, could contain some e-commerce components.

James Breeze is the national director of Industrial Research for Colliers International, where he focuses on analyzing industrial property trends, compiling Colliers’ thought leadership and delivering timely market projections to provide clients with a leading edge in our industry.

About the Author