As eCommerce continues to be the growth engine for many brands, “last mile” or the last leg of delivery is critical in moving goods from strategically located industrial transportation hubs to a consumer’s home or business. The expansion of retail, coupled with consumers’ increasing demand for shorter delivery time, means businesses need an efficient and expansive last mile strategy. Cushman & Wakefield’s Chicago research and marketing teams collaborated on in an interactive infographic that shows why Chicago is the perfect place for last mile expansion.
Chicago’s relatively low cost and availability of labor coupled with its influx of new companies and an incredibly diversified economy makes it a hotbed for last-mile expansion and population reach. Chicago has the key demographics and existing transportation networks that make it an ideal market for supply chain, logistics and eCommerce companies. Traditionally, more affluent, younger individuals are the dominant users of eCommerce. Chicago is the #2 growth market for affluent millennials, those aged 23-38 and making a household income of over $100,000 annually. In 2018, the Chicago MSA had $178 billion in retail sales with approximately $19 billion spent on eCommerce.
Superior Reach & Logistics
Chicago is the top U.S. metropolitan area for intermodal volume handling nearly 6 million containers and trailers per year, five times as many as cities such as Atlanta, Dallas, New York and Seattle.
- $564 billion in goods weighing some 269 million tons are moved into and out of metropolitan Chicago each year by truck, rail, water and air freight.
- One of two international airports in Chicago, O’Hare processes 1.8 million tons of freight worth over $200 billion each year.
- Chicago’s nine major interstate highways host drivers clocking 35,116 annual vehicle miles.
- The Chicago market’s 20 intermodal facilities provide 3,900 miles of rail lines.
- eCommerce users can reach 48+ MILLION people within a SIX HOUR drive of downtown Chicago.
What Does this Mean for CRE?
As eCommerce and automation continue to explode, last-mile industrial real estate will become more crucial than ever. As of May 2019, there are nearly 400 active Amazon distribution facilities in the U.S. comprising over 142 msf. By 2020, U.S. eCommerce share of retail sales will reach 11%. Industrial buildings will be reconfigured to support last mile innovations such as drones and robotics in warehouses, which will streamline distribution providing consumers with even faster, more convenient order fulfillment. We will see creative reuses of urban core space, such as downtown multi-story distribution centers and parking garage conversions for package handling. As retail store footprints get smaller, industrial spaces will need to get larger to accommodate more online sales.
Featured Cushman & Wakefield Last Mile Listings
The construction of last mile facilities in Chicago has exploded over the past few years, with over 3,500,000 square feet currently under construction or already delivered between 2015 and 2019, compared to the approximately 530,000 square feet delivered in the market between 2000 and 2015. Our team represents several high-profile last mile distribution facilities servicing the Chicago loop and the northside of the city.