Commercial Real Estate News
Industrial Properties by U.S. Airports Command Premium Rents
Airport Access Helps Distribution Firms Prioritize Delivery Speed
According to CBRE, distribution firms want to be close to major air hubs to expedite speedy deliveries, but there is often a price to pay: Industrial rent premiums average 13 percent in the top U.S. airport submarkets and reach as high as 47% in the Chicago O'Hare submarket.
In the era of next-day delivery, third-party logistics firms, ecommerce companies and retailers are all vying for industrial space with proximity to major airports. Operators appear willing to pay a premium for this coveted, but limited, real estate to meet customer expectations of rapid order fulfillment.
New CBRE research shows that the top airport submarkets by cargo volume garner rents above the local market average. The highest premiums are seen in the Chicago O'Hare (47.1 percent), Oakland (32 percent), and Dallas/Fort Worth airport (22.1 percent) submarkets.
Third-party logistics firms are the main drivers of this activity, accounting for 29.6 percent of activity in major airport submarkets, followed by general retail and wholesale (24.4%) and pure-play e-commerce-only companies (16%).
"As ecommerce providers and retailers compete to offer faster delivery times, air freight will increasingly be a key component of distribution strategy," said John Morris, executive managing director and leader of CBRE's Americas Industrial & Logistics business. "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."
