Demand for industrial & logistics warehousing space is driving an increase in megawarehouses, according to a new CBRE report. The largest 100 industrial lease transactions in 2022 included 14 deals in Georgia, eight of which were signed in the Atlanta metro area while six were signed in and around Savannah.

Traditional retailers/wholesalers accounted for 53 of the top 100 deals, expanding their footprints to accommodate e-commerce sales growth and store more inventory. In Atlanta, five of the eight largest leases were signed by retailers/wholesalers. Atlanta’s eight megawarehouse deals, totaling approximately 8 million sq. ft., ranked it third in CBRE’s latest report, up from fifth place last year.

“Atlanta remains a strong market for logistics operations with its strategic location, access to labor, and rental rates that are lower than other major markets around the county,” said Chris Dempsey, Senior Vice President with CBRE in Atlanta. “These factors have long been a driver for growth in Atlanta’s industrial market and have benefited from dramatic demand for warehouse space in the post-pandemic environment.”

Third-party logistics (3PL) operators signed 18 of the top leases nationally, up from only 10 in 2021. Half of Savannah’s largest industrial leases were signed by 3PL firms. Savannah’s six megawarehouse deals ranked it fourth among all U.S. markets. The coastal city did not rank in last year’s report.

“Savannah is one of the most efficient and reliable gateways in the country—a market of choice for import and export logistics operations. The port’s unprecedented container volume growth has fueled the region’s expanding warehouse market, which has doubled in size over the last five years,” said Bill Sparks, Executive Vice President of CBRE in Savannah. “More than 25 million sq. ft. of Class A space is under construction, providing a healthy number of options for occupiers.”

E-commerce companies followed closely behind retailers/wholesalers and 3PL firms with 14 of the top 100 leases, down from 21 in 2021. Of the top 100 transactions, an unprecedented 63 measured 1 million sq. ft. or more, up from 57 in 2021. Overall, the average size of the 100 top leases was 1.07 million sq. ft., compared to 2021’s previous record of 1.05 million sq. ft.

“Despite an expected recession, the leasing of megafacilities is expected to remain solid this year as many occupiers continue to build out their e-commerce operations and sustain their inventory levels,” said John Morris, president of Americas Industrial & Logistics for CBRE. “Strong demand for megawarehousing centers is expected to continue in 2023 and a large number of construction completions will provide more opportunities for expansion.”

Top markets for these leases included traditional mainstays like the Inland Empire, Chicago and Atlanta, as well as growing markets such as Dallas-Fort Worth, Phoenix and Columbus.