What Is Last-Mile Distribution in Industrial Real Estate? 

Last-mile distribution—the final stage of delivery from a local facility to the end consumer—has transformed industrial real estate over the past decade. Last-mile facilities are now a critical competitive advantage, creating intense demand for infill industrial properties positioned within population-dense metropolitan cores. These urban-edge properties often operate on compressed timelines, with goods arriving and departing within hours rather than days.  

Why do last-mile locations matter in industrial real estate? 

Changing consumer expectations have redefined industrial real estate strategy. Same-day and next-day delivery options have transitioned from luxury services to standard offerings, forcing businesses to reimagine their distribution operations. This makes last-mile locations critical assets for companies competing in today's speed-driven marketplace. 

Shorter distances to consumers mean faster deliveries, lower fuel costs and greater customer satisfaction. A warehouse situated, say, 15 miles from a metropolitan core can service far more customers within a two-hour window than a facility 50 miles away. Major markets such as Philadelphia, New York, Dallas-Fort Worth and the San Francisco Bay Area are ideal for the last-mile model, offering proximity to millions of consumers within tight delivery windows.  

Here is how this works in practice: When you order something from Amazon or another online retailer and it arrives within a day or two, that product likely gets to your house from a last-mile warehouse or distribution center. It was already in your area before the moment you clicked “buy.”  

How do last-mile warehouses help businesses? 

While last-mile facilities can carry higher per-square-foot acquisition and development costs, the operational benefits are substantial. E-commerce companies also report that faster delivery times drive higher overall sales.  

Transportation expenses—fuel, vehicle maintenance and driver wages—represent significant portions of logistics budgets. By reducing the average distance drivers must travel, companies can service more customers per route, maximize vehicle utilization and reduce fuel costs simultaneously. Moreover, last-mile warehouses allow businesses to maintain smaller, more agile fleets instead of investing in extensive transportation networks.  

What should businesses look for in a last-mile warehouse? 

The most valuable last-mile warehouses combine proximity with infrastructure designed for rapid movement of goods.  

Direct access to major highways, minimal traffic congestion during peak delivery hours and well-maintained local road networks separate truly strategic sites from merely convenient ones. Modern last-mile facilities require specific design characteristics, including larger truck courts to accommodate higher delivery vehicle turnover and multiple dock doors for simultaneous loading and unloading operations. Ceiling heights, while less critical than in bulk distribution centers, must still support efficient racking systems for inventory management. Additionally, properties near intermodal connections—airports, seaports or rail terminals—provide additional flexibility. These locations allow occupiers to source inventory quickly from multiple channels, reducing dependency on single supply chain routes.  

These design and location factors are essential considerations when evaluating last-mile warehouse space.  

How does a last-mile strategy benefit investors? 

E-commerce growth continues to surge across virtually all product categories—U.S. retail e-commerce sales rose 6.2 percent from Q1 to Q2 2025 alone. This trend ensures sustained demand for last-mile industrial and warehouse space, making these assets attractive for long-term investors. Forward-thinking developers recognize that last-mile facilities serve multiple customer types beyond traditional retailers: food delivery services, pharmaceutical distributors, auto parts suppliers and grocery chains all require rapid access to urban consumers. This diversified tenant demand, combined with limited urban land availability, positions last-mile properties as resilient investments in an evolving logistics landscape.  

Understanding last-mile distribution is essential for optimizing your supply chain. Search available industrial properties by location, size and facility type to identify spaces that match your specific requirements. You can also explore Link Logistics’ portfolio of warehouse and distribution facilities across major U.S. markets.