CBRE research highlights industrial real estate rate gains near major airports

Rents in areas located in close proximity to major United States-based airports continue to see sizable gains, according to research recently issued by Los Angeles-based industrial real estate firm CBRE.

In a research brief, entitled “Industrial Facilities Near Airports Command Rent Premiums,” CBRE explained that companies are locating distribution operations closer to airports, or air cargo ports, in order to counter various challenges, especially increasing transportation costs, which it said account for 45%-to-70% of overall supply chain costs—based on data issued by the company’s subsidiary CBRE Supply Chain Advisory. This represents a steep uptick compared to occupancy costs, which account for 3%-to-6%, said CBRE.

What’s more, CBRE said that in an analysis of the 20 busiest U.S. airports for airfreight that average rents for warehouses located in a five-mile radius of major airports are 18.8% higher compared to the average for their metropolitan areas.

CBRE observed that the U.S. airports that have seen the highest rent premiums are Los Angeles (LAX), at $23.02, New York (JFK), at $32.35, South Florida (MIA), at $13.33, Chicago (ORD), at $7.73, and Philadelphia (PHL), at $10.00. It explained that: “these airports serve markets that are densely populated and lack developable land, contributing to rent premiums of 24% or more at properties located within a five-mile radius of them. Rent growth will likely accelerate in these markets due to highly constrained supply and elevated transportation costs.”

CBRE Global Head of Industrial & Logistics Research James Breeze said in an interview that being as close as possible to a major transportation hub, whether it be air, ground, or sea, will save occupiers money in the long run, adding this drives up demand for those spaces and thus rents.

The report added that 3PLs (third-party logistics services providers) represent the largest number—at 42.7%—of leasing activity in 2022, to date, topping the segment’s share of total warehouse leasing, at 35.6%, followed by general retail and wholesale companies, at 32.2%, and food and beverage companies, at 5.2%.

When asked if 3PLs are expected to continue to lead the charge for this type of leasing activity, Breeze said CBRE continues to see distribution outsourced to 3PLs at a greater clip and do not see this changing any time soon.

“Occupiers are outsourcing distribution because of difficulty finding space, labor challenges, economic uncertainty and higher supply chain costs,” he said. “This trend really took off during the initial COVID-19 outbreak. Many occupiers were seeing the benefit of utilizing 3PLs during this period of uncertainty and the trend continues to grow. 3PLs, like any occupier type, are looking to save on costs and can benefit from being closer to major transport hubs.”

至于占领者所面临的最大挑战,当they relate to securing space, Breeze pointed to tight supply as being the biggest challenge.

“Vacancy rates are lower for product near any kind of transport hub and available land is difficult to find, so there will always be a supply-demand imbalance,” he said. “This difficulty in finding space is why outsourcing to 3PLs continue to rise.”

CBRE Americas President of Industrial & Logistics John Morris said in a statement that the immediacy of e-commerce deliveries and the generally faster pace of business than in past decades, among other factors, have made airport warehouses a critical link in many supply chains. And he noted that rents for these properties will continue to exceed their market averages for the foreseeable future.