A last-mile facility is an infill industrial building sited close to end consumers to shorten the final leg of delivery. It is smaller and more urban than a regional distribution center, usually 25,000 to 100,000 square feet, and its value is driven by proximity to dense population rather than by size or clear height. Speed to the customer is the point.
What Is a Last-Mile Facility?
A last-mile facility is a warehouse positioned in a dense, infill location so goods reach nearby consumers quickly. It is defined by its proximity to population, not its scale: these are smaller-bay buildings in urban and suburban submarkets, typically 25,000 to 100,000 square feet, per Link Logistics, that stage and dispatch orders for same-day or next-day delivery.
The economics invert the usual industrial trade-off. In a regional distribution center, cost per square foot is minimized and land is cheap. In a last-mile building, land is expensive and scarce, so the value is the location. Link Logistics classifies these as smaller regional and last-mile operations occupying 25,000 to 100,000 square feet, sitting inside the delivery radius of the population they serve rather than at a low-cost highway interchange.
Attribute | Last-mile target | Source |
Building size | 25,000 to 100,000 sq ft | Link Logistics |
Location | Dense infill, near consumers | Link Logistics |
Primary value driver | Proximity, not square footage | Link Logistics |
Typical use | Same-day and next-day dispatch | Link Logistics |
Why a Last-Mile Facility Matters
A last-mile facility matters because the final leg of delivery is the most expensive part of the supply chain, and locating inventory near the customer is the main lever to cut it. E-commerce demand has pushed operators to pay premium rents for scarce infill land, since a building minutes from consumers can support delivery windows a distant regional box cannot.
For an underwriter, this reprices the asset. A last-mile building trades on the strength of its trade area, not on modern clear height or column spacing, so an older, lower-spec box in the right infill location can outvalue a newer building in a cheaper outlying submarket. The Q1 2026 national industrial vacancy rate was 7.0 percent, per Cushman & Wakefield, but infill submarkets that host last-mile facilities typically run tighter, which supports higher rent and lower vacancy risk for well-located product.
Example
A 60,000-square-foot last-mile facility in an infill submarket leases at a premium to the national industrial average. The worked figures below carry rent through to value at a cap rate typical of well-located urban product.
Component | Value |
Building area | 60,000 sq ft |
Infill asking rent (25% premium to national) | $12.75 per sq ft |
Gross rental income | $765,000 |
Operating expenses (net, 15%) | $114,750 |
Net operating income | $650,250 |
The national industrial asking rent was $10.20 per square foot in Q1 2026, per Cushman & Wakefield. Applying a representative 25 percent infill premium gives $12.75 per square foot. Gross rental income is 60,000 times $12.75, or $765,000. On a net lease with a 15 percent expense load of $114,750, net operating income is $650,250. At a 5.5 percent cap rate reflecting scarce infill land, implied value is $650,250 divided by 0.055, or roughly $11.8 million.
Variations and Edge Cases
Last-mile facilities vary by form because infill land is constrained, so operators adapt whatever space the trade area offers. The table lists common variants an underwriter should distinguish.
Variant | Treatment |
Purpose-built last-mile | New infill box designed for fast dispatch |
Converted retail or industrial | Old big-box or warehouse repurposed for delivery |
Multi-story urban logistics | Dense-market buildings stacking floors on scarce land |
Micro-fulfillment | Very small units embedded in retail or mixed-use |
Parcel delivery station | Van-loading layout for a carrier's final leg |
The common error is applying regional-distribution comps to a last-mile building. The two compete for different tenants and different land, so a last-mile asset should be underwritten on its trade area and delivery reach, not on cost per square foot alone.
Last-Mile Facility vs Bulk Warehouse
A last-mile facility is often confused with a bulk warehouse because both are industrial buildings that move goods. A last-mile facility is a smaller, infill building near consumers, 25,000 to 100,000 square feet, whose value is proximity to population. A bulk warehouse is a large, high-clear-height storage building, often 250,000 square feet or more, sited on cheap land near highways to hold inventory at scale.
The distinction is location versus scale. A last-mile building trades on how fast it reaches customers and pays a premium for scarce urban land. A bulk warehouse trades on cubic storage capacity and minimizes cost per square foot at a distant interchange. One optimizes for delivery speed, the other for storage volume.
Frequently Asked Questions
What is a last-mile facility?A last-mile facility is an infill industrial building sited close to end consumers to shorten the final leg of delivery. It is usually 25,000 to 100,000 square feet, per Link Logistics, and its value is driven by proximity to dense population rather than by building size or clear height.
How big is a last-mile facility?Last-mile and smaller regional operations typically occupy 25,000 to 100,000 square feet, per Link Logistics. They are smaller than regional distribution centers because their purpose is fast delivery to a nearby trade area, not large-scale storage, so location matters more than footprint.
Why are last-mile facilities so valuable?Last-mile facilities are valuable because the final leg of delivery is the most expensive part of the supply chain, and locating inventory near consumers is the main way to cut it. Scarce infill land near dense population commands premium rents and typically runs tighter vacancy than outlying industrial submarkets.
Related Terms
Industrial
Bulk Warehouse
Cross-Dock Facility
Vacancy Rate
Market Rent