Retailers are paying more to access logistics properties that serve as final stops for packages bound for doorsteps

By Will Parker. The following article appeared in The Wall Street Journal, print edition, December 1, 2021.

The last mile in the e-commerce delivery process looks like a windfall for real-estate owners.

Industrial properties in general have enjoyed strong rent growth and record-low vacancies during the pandemic. An increase in online shopping has furthered the trend, creating greater demand for warehouses to hold ordered items.

Retailers especially covet space near highly populated areas where online orders can be loaded onto trucks and vans for local delivery to their final destinations. Retailers face a scarcity of final-stage warehouses near major cities; and as more companies promise same-day or even two-hour arrivals, such space is rising in demand and value.

More than half of U.S. industrial leasing in the third quarter involved users looking for space of less than 100,000 square feet, often a mark of a last-mile facility, according to a report from real-estate firm Jones Lang LaSalle Inc.

Other signs point to greater last-mile interest in major metro areas. While there has been a 15% increase in the hiring of light-truck drivers in the U.S. since 2019, the four boroughs of New York City outside Manhattan have seen a 24% increase over the same period, according to industry data analyzed by JLL. The real-estate firm said that reflected strong last-mile demand in prime urban cores.

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