New Amazon Air Hub and the Cincinnati Warehouse Market
Amazon’s latest step in its apparent plan to take over its own supply chain is an announced $1.5B cargo hub outside of Cincinnati. The hub, slated to be placed in Cincinnati/Northern Kentucky Airport (CVG) is expected to enable the company to fly its Amazon Prime cargo jet fleet into and out of a healthy property market blessed with what Amazon’s SVP of Worldwide Operations Dave Clark called “a large, skilled workforce, centralized location with great connectivity to our nearby fulfillment locations and an excellent quality of living for employees.”
Construction of the facility is sure to have some follow-on effects as vendors and customers consider the Airport submarket’s nearly 31 million sf of inventory. A recent arrival of new space allows plenty of options, boosting total vacant space to 1.4 million. Here’s a quick look at Queen City’s market as published this week in Xceligent’s 4Q2016 Cincinnati Industrial Market Report:
- During 4Q 2016 the industrial market has absorbed just over 538,504 square feet (sf), with a year to date absorption of just over 5.2M sf.
- As a result of just over 4.6 million sf of newly delivered space, industrial vacancy has risen from 3.7% in 2Q 2016 to 4.3%.
- The Tri-County submarket has posted the highest positive net absorption for two consecutive quarters, closing 4Q 2016 with just over 676,000 sf. This positive movement was offset by the Airport submarket which posted a negative net total of 750,000 sf.
- The weighted average asking rent has increased year over year from $3.56 per square foot (psf) to $3.96 psf. This increase can be attributed to an increased demand with limited warehouse availability.
Industrial Property Search: CVG Airport Cincinnati
Taking To The Skies
The location choice of CVG Airport by Amazon has the company striking while the iron is hot; the airport itself has been the beneficiary of ready warehouse inventory nearby. Its growth in freight handling has been in the double digits year-over-year for the last five years. If the extra freight loads Amazon represents seems a good fit for an airport with a record of expanding capacity in a sustained push, that may be part of the company’s interest in taking to the air: their designs for floating warehouses and plans for drone delivery are far more likely to arrive than it might at first seem. If there’s one thing Amazon does, it’s deliver.