LOGISTICS
Key Takeaways
Logistics
Properties
Asset Value
What is logistics real estate?
Who uses logistics real estate?
Online Retailers
Sell products primarily through digital outlets. As shopping habits evolve, the industry continues to rapidly expand. Amazon ranks as the largest online retailer in the US and rents hundreds of logistics facilities nationwide.i
Big Box Retailers
Rely on expansive networks of warehouses to supply stores. Many of these companies have developed online platforms to complement their physical footprints. Prominent examples include Walmart and Target.
Third-party Logistics
Firms, such as FedEx and UPS, that specialize in providing outsourced logistics services, including transportation, inventory management, and order fulfillment.
More than 61 million parcels pass through logistics buildings each day in the USii
What are the secular drivers for the sector?
- Online spending, which requires three times as much warehouse space as traditional retail sales,iii continues to accelerate, and total annual sales have nearly doubled over the past five years to $1.2 trillion.iv As shoppers increasingly gravitate toward digital outlets, online sales are expected to continue climbing.v
- Business inventories continue to climb steadily, deepening the need for storage space. Retail inventories increased more than 25% from the end of 2019 to the beginning of 2025.vii
- International trade brings in more than $840 billion worth of raw materials, intermediate goods, and finished goods into the US each year.ix Cities with major seaports are outgrowing current logistics properties and are looking to expand their logistics footprint.
Online Retail Spending Projected to Continue Acceleratingvi
Retail Inventories Have Rebounded from a Pandemic Dip and Are Still Climbingviii
What are the common building types?
Logistics properties are typically designed for a specific purpose and operating type, where loading/unloading, storage, and vehicle access determine optimal building use. Most logistics properties are single-story buildings with low maintenance costs and basic finishes.
Bulk Distribution Warehouses
(Typical Size: 750k+ SF) Serve as distribution hubs that service large geographic regions. Distribution centers can cover the equivalent of several football fields and are strategically located along highways on the outskirts of major cities.
Last-Mile Fulfillment Centers
(Typical Size: Varies) Represent the last step of the supply chain before products reach the consumer. These facilities are often found near highly populated areas to meet shopper expectations for next-day and same-day shipping.
Flex/R&D Buildings
(Typical Size: Varies) Multiuse spaces that include warehousing and light manufacturing, and they are typically located in business parks.
Specialty Logistics Buildings
(Typical Size: 25k-200k SF) Cater to specific user needs. Specialty logistics include truck terminals for loading and unloading, and cold storage sites for perishable items.
How is value created at the asset level?
- Create Efficiencies: Additional doors and loading docks can translate into faster product throughput, while expanded parking can support more workers and bigger semi-trucks.
- Technology: Many logistics tenants prioritize buildings that support state-of-the-art robotics and automation technology to streamline operations.
- Go vertical: Taller ceilings can meaningfully increase total storage area and are most economical when buildable land is scarce and expensive.
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- Business Park: A planned area developed specifically to accommodate offices, warehouses, or light industrial facilities for multiple businesses.
- Distribution Networks: The system of warehouses, transportation methods, and logistics partners used to move goods from producers to retailers or customers.
- Online Retail Spending: The amount of money consumers spend on purchasing goods and services through internet-based stores and platforms.
- Retail Inventories: The total amount of goods and products that a retail business keeps in stock for sale to customers.
i CoStar, as of Q1 2025.
ii Pitney Bowes, Parcel Shipping Index Report, 2024.
iii Green Street, US Industrial Outlook, January 28, 2025.
iv Moody’s Analytics, Baseline Scenario, as of May 2025.
v Moody’s Analytics, Baseline Scenario, as of May 2025.
vi Moody’s Analytics, Baseline Scenario, as of May 2025.
vii US Census Bureau via FRED, Manufacturing and Trade Inventories and Sales, as of February 2025.
viii US Census Bureau via FRED, Manufacturing and Trade Inventories and Sales, as of February 2025.
ix US Bureau of Economic Analysis via FRED, US International Transactions, as of Q4 2024.
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