Vacancy at cargo facilities in proximity to the nation’s leading airports is low, driving up rents for those who use the space, according to a report from market analyst JLL.
Vacancy at cargo facilities in proximity to the nation’s leading airports is low, driving up rents for those who use the space, according to a newly released report by market analyst JLL.
“Real estate investors with properties near intermodal-friendly airports like Chicago O’Hare and Miami International are reaping the benefits: higher rents, higher returns and lower vacancy rates,” said Rich Thompson, managing director of JLL’s Ports, Airports and Global Infrastructure group, in a statement.
In its 2015 Airport Outlook report, JLL cited a 4.5 percent increase in global air cargo in 2014, adding the transportation mode is expected to reach 5 percent growth this year.
“This has created a flurry of leasing, building and investment in the distribution center real estate surrounding key U.S. airports. And as a result, rents are rising for tenants, while returns rise for savvy investors,” JLL said.
JLL noted that the top airport location for industrial real estate investors is Chicago O’Hare, followed by Miami and Los Angeles international airports, due to their surrounding intermodal transportation infrastructure, access to numerous flights, local industrial bases, and large consumer populations.
Other airports, such as Dallas-Fort Worth and Indianapolis, have also attracted shippers and logistics companies due to their intermodal connectivity. “With numerous sites available to house big-box development, construction at these two airports over the past five years has grown. For example, 12 million square feet of warehouse space has been developed just outside DFW and 13.7 million square feet surrounding Indianapolis airport,” the firm explained.
JLL expects to see a “modest” air cargo growth over the next few years. “A portion of this will come from increasing global e-commerce sales and biotechnology. Also, thanks to e-commerce customer delivery expectations, warehouse space surrounding large city airports will continue to be in high demand,” the firm said.
The full report may be accessed here.
Report: Rents rising in U.S. airport cargo areas
