In e-commerce sellers’ relentless push to offer next-day delivery, third-party logistics (3PL) firms and retailers are driving up the price of prime industrial properties close to major airports, a new study from real estate firm CBRE says.
Since distribution firms want to be close to air hubs to expedite speedy deliveries, that demand is driving a 13% average premium for rent rates in most active U.S. airport submarkets, the Dallas-based firm said.
The price inflation is even higher in certain locations, with prices reaching a 47.1% premium above the local market average in the Chicago submarket for the coveted real estate. After Chicago, other spikes in property rates near airports with high cargo volumes include submarkets in Oakland (32%), Dallas/Fort Worth (22.1%), Los Angeles County (12.9%), and Inland Empire (12.2%).
CBRE also tracked single-digital percentage rent premiums in Atlanta, Louisville, Miami, Cincinnati, Indianapolis, and Memphis.
The main drivers of the trend are 3PLs, which account for 29.6% of real estate activity in major airport submarkets, followed by general retail and wholesale (24.4%) and pure-play e-commerce-only companies (16%).
“As e-commerce providers and retailers compete to offer faster delivery times, air freight will increasingly be a key component of distribution strategy,” John Morris, executive managing director and leader of CBRE’s Americas Industrial & Logistics business, said in a release. “Rent for warehouses and distribution centers around major air cargo hubs should continue to rise, especially in markets where there is limited development space. Customers today expect fast delivery, but there is a cost associated with leveraging air transportation for e-commerce delivery.”