Warehouse Demand Wanes
Commercial Observer
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It was probably inevitable given how much demand spiked during the pandemic-fueled e-commerce boom, but the general appetite for warehouse space has started to cool. Though a new report makes clear that green energy might help the sector get its fill in the end. Also for today, New York’s commercial real estate industry is still waiting for its marching orders in terms of helping solve that city’s migrant crisis.
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— Tom Acitelli, Deputy Editor
Warehouse Demand Slows While Green Energy Firms Look for More Space
Big e-commerce and distribution tenants are looking for less warehouse space across the country than they were a year ago, even as demand has grown for space to make batteries, electric vehicles, wind and solar components, and medical devices, according to a new JLL report. Tenants were searching for about 807 million square feet of industrial space this year, down by about 8 percent from 2022’s total of 873 million, the report found. While logistics and distribution companies still need more space than any other kind of industrial user, demand for warehouse space declined 12 percent year-over-year to 694 million square feet. Meanwhile, manufacturers of clean energy equipment, electric vehicles and batteries are in the market for 100 million square feet this year, up from the 65 million square feet they wanted in 2022.
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Commercial Real Estate Finds Its Role Limited in NYC Migrant Crisis
New York City has been grappling with an influx of asylum seekers for the past 18 months, but city leaders are still approaching the crisis as if it were an emergency. It’s an emergency that the commercial real estate industry is largely sidelined for, awaiting direction from public officials. Mayor Eric Adams has consistently warned that a continued surge of migrants will “destroy” New York City, forcing him to make painful budget cuts. He called for more federal aid to handle costs, demanded the Biden administration speed up work permits for thousands of new arrivals, and even visited Central America in October to dissuade migrants from traveling to America.
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