A widening performance gap has emerged between modern class A warehouses and older, legacy facilities, raising questions about which features drive positive absorption for class A assets despite the broader market slowdown. Several factors are contributing to tenants’ flight-to-quality and preference for modern logistics facilities.
“Tenants today are increasingly focused on operational efficiency, prioritizing buildings that support advanced logistics and inventory management systems,” said Michael McCarthy, managing director, co-CIO of value-add programs, Cabot Properties, in an exclusive interview with IREI. The adoption of high-tech, artificial-intelligence (AI)-driven, and automation-enabled systems requires modern infrastructure — features newer facilities are designed to accommodate.
“Although class A rents have risen substantially over the past five years, it seems many tenants are willing to pay a premium for facilities that can help to maximize thei
