Industrial Sector’s Big Box Segment Sees Strong First Half, Colliers Data Reveals

By Barbra Murray

The first half of 2019 proved to be yet another strong period in the big-box segment of the industrial sector, and despite certain challenges, more of the same is the likely scenario for the remainder of the year, according to Colliers’ 2019 midyear big-box market report.

The big-box industrial market comprises pre-cast or tilt-up construction industrial buildings that encompass a minimum of 200,000 square feet and are utilized primarily for distribution activity. At the close of the second quarter, there were 5,208 such facilities totaling nearly 2.4 billion square feet in North America, and the midyear numbers tell a positive story for the subsector. The average vacancy rate was 6.9 percent and the average taking rent, which has been on a consistent upswing since 2011, reached a record high of $5.03 per square foot. Overall net absorption totaled approximately 66.1 million square feet, surpassing mid-2018’s 61.5 million.


North America’s core big-box markets—California’s Inland Empire, Dallas-Fort Worth, Atlanta, Chicago, Northern-Central New Jersey, Southern New Jersey-Eastern Pennsylvania and Toronto—remained highly coveted among occupiers during the first six months ending June 30. The Inland Empire maintained its position as the top-performing market, buoyed by its desirable location, developable land inventory and strong workforce. The area recorded 14.7 million square feet of new leasing, the most in North America, and 7.3 million square feet of net absorption. Dallas-Fort Worth logged the highest net absorption of the top seven markets, approximately 8.8 million square feet, and Toronto posted the lowest vacancy rate, just 1.1 percent. 

There was, however, at least one notable change in the steady big-box market in the first half of 2019, with third-party logistics companies, not e-commerce retailers, inking the majority of lease agreements. Colliers expects the rise in 3PLs’ presence in the market to be an ongoing trend, as these companies are increasing their e-commerce capabilities at a faster pace than any other major industrial user. 

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