The average age of a warehouse used for order fulfillment is 34 years, leaving many facilities outdated and incapable of handling the rush of orders placed through B2B and B2C e-commerce, real estate services firm CBRE says.

B2B e-commerce is now generating about $900 million in sales in the United States, according to Forrester Research Inc. Meanwhile, business-to-consumer e-commerce rose 16.0% to reach $453.46 billion, compared with $390.99 billion in 2016, according to the U.S. Department of Commerce.

E-commerce has created demand for a new type of warehouse with different dimensions, locations and capabilities,
David Egan, global head of industrial and logistics research
CBRE Group

But while the market for both B2B and B2C e-commerce is growing, the capacity of the nation’s aging warehouse industry has not been able to keep up with the demand for faster ways to store inventory and ship orders , says recent research from CBRE Group Inc., a large Los Angles commercial real estate services and investment company.

The U.S. currently has more than 9.1 billion square feet of warehousing space, and commercial builders have added more than 1 billion square feet of new space over the past decade, says CBRE global head of industrial and logistics research David Egan. But the average age of a U.S. warehouse is now 34 years and many older facilities lack the fundamental features such as high ceilings, more load bays and bigger floor space to accommodate more automated supply chains, logistics management and order management for e-commerce, Egan says.

“E-commerce has created demand for a new type of warehouse with different dimensions, locations and capabilities than what most of the existing U.S. supply offers,” Egan says. “Given that only a small portion of the overall market is truly modernized, there is a strong case for new construction and redevelopment of outdated facilities in many markets.”

Last year, commercial developers and builders constructed about 183 million square feet of new warehousing space, compared with about 100 million new square feet of space each year over the past decade, CBRE says. But as B2B and B2C e-commerce accelerates and business buyers and consumers want even faster shipping and delivery options, manufacturers, distributors and online retailers, among others, are looking for more open and modern warehouse space. “Modern facilities with larger footprints, high ceilings and close proximity to major population centers are in strong demand,” Egan says. “Three quarters of U.S. warehouses that went under new leases in 2016 and 2017 were buildings constructed within the past five years.”


CBRE says it analyzed data from 56 major U.S. markets and found that most facilities built prior to the mid-2000s have limitations that preclude their use for e-commerce distribution, such as low ceilings, small footprints, uneven floors and inadequate docking. The breakdown of markets with the oldest and youngest average ages of warehouse stock tends to fall along geographic lines. Many of the oldest markets are in the Northeast, led by Northern New Jersey with an average warehouse age of 57, Pittsburgh (56), Boston (44) and Philadelphia (44).

Recognizing the void in the warehousing industry, shipping services company United Parcel Service last week launched Ware2Go, a web portal that matches warehousing and fulfillment needs of merchants with a network of warehouses and fulfillment centers located throughout the U.S. The Ware2Go services provide two-day delivery guaranteed by UPS; it also lets clients use the portal to manage inventory in warehouses nearest their customers and track shipments. UPS, which doesn’t publicize the pricing for Ware2Go’s services, says Ware2Go caters primarily to small and mid-sized businesses that ship products to other businesses.

According to CBRE, the youngest warehouse markets mostly operate in the West and South, led by California’s Inland Empire (20 years), Las Vegas (23), Phoenix (26) and Atlanta (29), CBRE says. “Markets with the newest warehouses tend to have ample developable land and are near major population centers, while markets with the oldest warehouses tend to serve heavy industrial and shipping centers,” Egan says. “Given the low share of modern warehouse space and the rise of e-commerce, there’s ample opportunity to develop new warehouses and rebuild physically obsolete ones in the best infill locations.”

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