Warehouse development in Metro DC evolving amidst changing demand and record low vacancy
The rise of e-commerce and robust multi-family development has elevated the importance of urban logistics.
November 13, 2019
- While the rise of e-commerce and robust multi-family development has elevated the importance of urban logistics, the Metro DC region’s concentration of affluent online shoppers across its suburban landscape has shaped the industrial market as well. Recent warehouse development has occurred in the suburbs in close proximity to concentrations of households with high-retail spend and adoption of online shopping.
- Last month, FedEx held the formal opening of their Gaithersburg distribution center, a 300,000-s.f. build-to-suit. Montgomery County has traditionally seen limited industrial development, but dense clustering of affluent households from Upper Northwest up the I-270 Corridor and out towards Potomac has made it a target for logistics users.
- Rapidly growing Northern Virginia has generated ground-up warehouse development inside the Beltway for the first time in decades at 6885 Commercial Drive. The 190,000-s.f. spec building delivered earlier this year and quickly leased the bulk of its space to an e-commerce user, while Sterling remains a traditional focal point for development.
- As logistics users serve increasing demand from the District to the suburbs, the crunch for warehouse product in the region, which has seen vacancy drop to a 15+ year low, will continue to lead to evolving development patterns.
Source: JLL Research, Esri