Supply and demand trends are set to support last-mile industrial facilities, as changing consumer preferences have pushed e-commerce providers toward shorter delivery times — but the existing supply of warehouse properties in urban locations are old and outdated.

“Last mile is really about the push to get products closer to consumers,” said James Koman, CEO of ElmTree Funds, a St. Louis–based firm that invests in single-tenant net-lease industrial properties. He pointed to online retailers’ need to “satisfy immediate gratification.”

In 2019, e-commerce was 11 percent of all retail sales, up from 4 percent in 2010. And as online shoppers have begun to expect shorter delivery times — from two day to one day to same day — it has become necessary for e-commerce platforms and third-party logistics providers to occupy space “within an hour of the city center or less,” noted Koman.

Desirable last-mile properties are typically 70,000 square feet to