Industrial Buildings Jockey to Be Near Highways of Major Metro Hubs

Are long-held suppositions always correct, or are they sometimes the equivalent of clichés, sometimes true and sometimes not/?

CBRE decided to check out this theory by analyzing data near Atlanta, one key logistics hub with numerous interstate and state highways. Where did industrial buildings in this Southern city locate?

First, the backstory on the state and Atlanta’s transportation venues. Georgia is served by a total of 15 interstate highways, putting it 10th in the nation in terms of superhighways. Six interstate highways—I-20, I-75, I-85, I-285, I-575, and I-675—help link together metropolitan Atlanta businesses (and residents), but creating urban sprawl.  

CBRE divided the designated Atlanta market into three zones, based on proximity to highway access ramps. It labeled all Census blocks containing an on ramp as Zone 1, then land adjacent as Zone 2 and the remaining areas, not adjacent to an on ramp, as Zone 3. 

In each zone, it added industrial buildings and more than half of them were in Zone 1, the equivalent of more than 10% of the metropolitan area’s land. That may not seem a large quantity but what’s important is that it’s becoming increasingly crowded. Of the 50 million square feet constructed in metro Atlanta over the last decade, 63% was built in Zone 1, with Zone 2 accounting for a far smaller 25% and Zone 3 even less than half of that or 12%.

From this analysis, it’s clear that industrial properties want easy on and off access from highways to their industrial buildings inventory. Saving time saves money, especially in more and more congested markets.

But is Atlanta an exception or the rule? CBRE also looked at that theory. In some other important logistic hubs, the same concept of locating near an on ramp holds true. Dallas and Riverside have done so, for example, respectively, with 71% and 75% of their industrial inventory located in a Zone 1 location. 

But not all metros do. In some, locating and clustering together by a ramp and highway is less commonplace, such as smaller cities with fewer interstate highways such as Austin, the report found. 

But it’s also true in older, more densely populated metros like Boston, Philadelphia and Chicago. In those markets, it’s because some of the inventory predates the federal highway system.