E-Commerce Growth Gives Rise to Taller Warehouses in U.S.

E-Commerce Growth Gives Rise to Taller Warehouses in U.S.

Commercial News » Los Angeles Edition | By Michael Gerrity | March 29, 2017 9:00 AM ET

New Focus on Three-Dimensional Measurements
According to CBRE Group, Inc., the rapid growth of e-commerce fulfillment networks in recent years has resulted in a steady increase in the height and volume of warehouses and distribution centers, likely necessitating a shift to three-dimensional measurement of industrial space.

The average height of warehouses built in the U.S. has steadily risen from roughly 24 feet in the 1960s to 32.4 feet this decade (33 feet in 2016). E-commerce companies have made use of that additional vertical space by installing mezzanine levels, allowing them to add more human inventory pickers in each building.

Such mezzanine levels aren't typically included in measures of a property's or market's industrial square footage. Thus, measuring cubic footage might be the better way to examine the full extent of warehouse and distribution-center space.

CBRE data shows that 13.7 billion cubic feet of warehouse space was built in the U.S. from 2010 to 2016, with 65 percent of that total coming in the 10 largest markets, led by California's Inland Empire, Dallas/Fort Worth and Chicago.

In contrast, measuring those newly built warehouses by ground-level floor area yields only 422.5 million square feet.

"There's an argument to be made that industrial space should be talked about on a volume basis, not an area basis, because that space above the floor is very important," said David Egan, CBRE Head of Industrial & Logistics Research in the Americas. "It's key for labor-intensive users like e-commerce companies, which can put more racks and employees in that additional workable space."

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