In 2022, the leasing demand for more ecommerce warehouse space will remain high — as will rents, says Cushman & Wakefield.

Ecommerce sellers, whether they are engaged in business-to-business or business-to-consumer online commerce, are gobbling up warehouse- and distribution-center space at a record pace.

Online sellers also are paying a hefty premium for their new space, a trend that will continue for at least the foreseeable future, says new research from Los Angeles commercial realtor and services firm Cushman & Wakefield.

In 2021, driven by booming B2B and B2C ecommerce sales brought on by the pandemic and growing numbers of business buyers and consumers, which want online orders delivered to their home or business, ecommerce sellers or the third-party logistics providers (3PL) they commission for order fulfillment and distribution leased 77.1 million square feet of space, says Cushman & Wakefield,.

“Ecommerce companies had accounted for 28.2% of all industrial absorption from 2016 through 2019, and that number increased even more to approximately 40% from 2020 through 2021 as COVID-19 shifted consumer shopping patterns to more frequent online purchasing,” write Cushman & Wakefield senior research manager, industrial logistics, global research Carolyn Salzer and senior research director, US industrial Jason Price. “In 2020, a record 97.5 msf [million square feet] were leased directly by ecommerce occupiers, while another 77.1 msf were transacted throughout 2021.”

In 2022, the leasing demand for more ecommerce warehouse space will remain high — as will rents, says Cushman & Wakefield.

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“Rent growth for warehouse and logistics should rise by more than 15% over the next two years,” write Salzer and Price.

“Transportation costs account for nearly 65% of total logistics costs, making it the focus of any strategy aiming to reduce supply chain costs,” says Cushman & Wakefield. “Inefficiencies converge around transportation, especially in dense urban areas — for ecommerce occupiers, reducing the delivery distance to 30 minutes or less is critical.”

But ecommerce fulfillment is much more space-intensive than traditional warehousing, the commercial realtor says.

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“The long-term structural growth rate of logistics real estate has increased in tandem with the growth of ecommerce, and this is expected to continue,” write Salzer and Price.

In 2022, more leasable distribution and warehouse will be coming online, says Cushman & Wakefield. But ecommerce sellers also will continue to pay higher rents.

“As available Class A space inventories diminished over the last few years, ecommerce tenants have been extremely active within new construction and development sites, willing to pay higher rents for new, modern logistics space in key locations,” the commercial realtor says.

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Cushman & Wakefield project total industrial demand to remain robust as roughly 800-850 million square feet of space will be absorbed from 2022 to 2023. But ecommerce tenants are projected to continue to account for between 35% and 40% of that space, says Cushman & Wakefield.

“As market conditions are anticipated to remain at historically tight levels, despite the plethora of new supply expected to deliver in 2022 and 2023, ecommerce and other top occupiers of warehouse space will be pushed to focus on new development options, which boast premium taking rent,” write Salzer and Price.

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