PHOTO: ROGER KISBY/BLOOMBERG NEWS
Inflation Pressure Hits New Warehouse Leases
Landlords are incorporating higher prices into increasingly expensive contracts, extending the rising costs in supply chains.
Rental rates to replace expiring multiyear warehouse leases are rising at a sharp pace, according to a new report, as real-estate firms look to incorporate the higher prices they have taken during the pandemic into new contracts.
Prices to lease industrial properties are up an average of 25% over the rates at the end of five-year contracts that expired this year, according to a report real-estate firm CBRE Group Inc. released Monday. The increases, which come as strong consumer demand and a surge in e-commerce business have triggered a rush on distribution space, are extending higher supply-chain costs to customers that had long-term contracts that insulated them from the rising warehouse expenses.
“We don’t see any mitigation in demand for industrial space,” said John Morris, who leads industrial and logistics at CBRE, adding that the company has never seen increases this high.
Read the full article on the Wall Street Journal >