by Dan Rafter
Five Midwest regions rank among the top distribution markets in the United States, according to a new industrial report from JLL.
JLL ranked the Chicago metropolitan area, which includes Milwaukee, as the fourth-best distribution market in the country. It picked what it calls the Mideast region — which includes the Indianapolis, Cincinnati and Columbus markets — as the seventh-best.
JLL chose the New Jersey/New York metropolitan area, Southern California and Central and Eastern Pennsylvania as the top-three distribution markets.
What helped the Midwest markets on this list rank so high? JLL says that Chicago draws large users looking to serve a wide geographic footprint. The Chicago market also boasts strong intermodal capabilities, a thriving network of rail service and the busy O’Hare International Airport.
JLL says that Milwaukee is an interesting satellite market for Chicago. Labor costs might be a bit higher here, but JLL says that demand in Milwaukee is high enough that the metropolitan area remains a tight distribution market with few Class-A space options available.
What makes the Indianapolis, Cincinnati and Columbus markets such strong distribution centers? Location is key, according to JLL. These three markets are within a day’s drive of a huge swath of the country, a prime benefit to industrial users. Labor is also skilled here and affordable. The cities’ strong interstate and air cargo options also give them a boost.
JLL says that Indianapolis benefits from a significant stock of Class-A space, has not been overbuilt and has a relatively low land-cost basis. Columbus has favorable labor rates and relatively inexpensive real estate or development options, while Cincinnati’s metropolitan area has a low vacancy rate and a sizeable foundation of warehouse and distribution real estate. it also has the ability to reach an extended portion of the Midwest population base. JLL said that Cincinnati can also tap into Louisville’s UPS air cargo hub.