All those excess retail inventories are starting to weigh on warehousing markets, says The Wall Street Journal. Companies are struggling to find space for the glut of apparel, kitchen appliances and other goods filling up their supply chains.
The inventories, along with a push by merchants to stockpile goods to get around shipping bottlenecks, is fueling new demand for storage space even as other parts of the U.S. economy start to waver.
Prologis said it expects another 800 million square feet of warehouse space to be needed beyond earlier projections to handle the bloated inventories.
Some of the goods remain stuck at seaports and some are heading to liquidators. There’s little space to be found, with the national vacancy rate down to just 2.9% last quarter, according to CBRE. But deliveries of new warehouses fell sharply last quarter as supply-chain problems hamstrung construction.
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