In brief
- 1
Delivery speed decides where the space has to be. Same-day orders rose from 8% to 23% between 2019 and 2025, per Prologis, and next-day from 28% to 45%, so a facility has to sit within 20-30 miles of consumers.
- 2
Location beats building quality for these users. Last-mile operators want 20,000-150,000 SF with 24-32 feet of clear height, and they will take an older building and an imperfect layout if the location lets them deliver fast.
- 3
Well-located small buildings rent at a premium. Last-mile space runs 20-40% over traditional industrial; an older building that rented at $5-7/SF NNN can rent at $8-12/SF NNN in the right spot.
- 4
The rent premium carries straight into value. On a 50,000 SF building, rent rising from $6.00 to $10.00 per SF and the cap rate falling from 7.5% to 6.5% takes value from $4.0M to $7.7M.
- 5
Central Mass reaches 4.5 million people within 30 miles. That covers the Boston, Worcester and Providence metros, and the region already has the 1970s-1990s Class B buildings of 20,000-80,000 SF with 20-28 foot clear heights that the use wants.
The last-mile revolution
Last-mile delivery is the final leg of a package's trip, from the distribution facility to the customer's door.
Why last-mile matters
Here's what consumers now expect:
| Delivery Speed | 2019 | 2025 |
|---|---|---|
| Same-day | 8% | 23% |
| Next-day | 28% | 45% |
| 2-3 day | 52% | 28% |
To deliver same-day or next-day, a facility has to sit within 20-30 miles of consumers.
What a last-mile building looks like
| Feature | Last-Mile | Traditional |
|---|---|---|
| Size | 20,000-150,000 SF | 200,000-1,000,000+ SF |
| Clear height | 24-32 feet | 32-40 feet |
| Dock doors | 1 per 3,000-5,000 SF | 1 per 7,500-10,000 SF |
| Car parking | 3-5 per 1,000 SF | 0.5-1 per 1,000 SF |
| Location | Urban/suburban | Rural/highway |
Why location beats building quality
Operators will take an older building, a lower clear height, and a layout that isn't perfect, as long as the location lets them deliver fast.
Who the tenants are
Amazon delivery stations: 80,000-150,000 SF, 10-15 year leases, investment grade
Parcel carriers (FedEx, UPS, DHL): building out small-format networks
3PL last-mile: serving several e-commerce clients at once
Grocery and food delivery: dark stores and micro-fulfillment, 10,000-40,000 SF
The Central Massachusetts opportunity
The geography works
From Central MA, an operator can cover:
- Greater Boston (to the east)
- Worcester metro (local)
- Providence (to the south)
- Hartford (to the southwest)
| Radius | Population | Drive Time |
|---|---|---|
| 15 miles | 1.2 million | 30 min |
| 30 miles | 4.5 million | 60 min |
The inventory is already here
Plenty of Central MA buildings hit the last-mile marks:
- 1970s-1990s construction
- 20,000-80,000 SF
- 20-28 foot clear height
- Good highway access
These are the "Class B" buildings, and they're wanted now.
What this means if you own the building
What it does to your rent
Before last-mile demand, an older building rented at $5-7/SF NNN. With the last-mile premium, a well-located building rents at $8-12/SF NNN.
What that does to value
| Metric | Before | After |
|---|---|---|
| Rent/SF | $6.00 | $10.00 |
| 50,000 SF rent | $300,000 | $500,000 |
| Cap rate | 7.5% | 6.5% |
| Value | $4.0M | $7.7M |
| Value increase | +$3.7M |
The improvements worth making
- Add dock doors
- Add parking for vans and cars
- Fix truck circulation
- Handle the basic cosmetics
- Put in LED lighting
Lornell Real Estate works in industrial properties across Central Massachusetts. Get in touch to talk through an investment or how to position a building.
Last-mile delivery is the final stage of a package's trip, from a distribution hub to the customer's door. It's what determines how fast the package shows up, which is what e-commerce customers judge you on.
Sources: CBRE, U.S. Census Bureau, Prologis.
Limitations: Market data, projections, and trend analyses reflect conditions at publication. Commercial real estate markets are inherently cyclical, and submarket and property-level performance can diverge significantly from the regional averages cited. Demographic data, employer information, and regulatory conditions are subject to change. This article does not constitute investment advice. Conduct property-specific due diligence and consult qualified professionals before making investment decisions.
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