Key Takeaways
- • Prologis Research proposes a four-category lexicon for logistics real estate, Last Touch, City Distribution, Multi-Market and Gateway, classified by delivery urgency and site selection criteria rather than the traditional "warehouse/distribution" and "flex" labels.
- • Prologis estimates roughly 45% of the U.S. logistics real estate market is positioned for Multi-Market distribution, 20% for Gateway, 25% for City distribution and 10% for Last Touch.
- • Last Touch sites are defined by an Income Reach of 95% or higher, while City sites require 85% or higher, measured as aggregate income within a one-hour peak-traffic drivetime relative to city center.
- • The top 25 U.S. markets, with aggregate income above $100 billion, qualify for at least a City presence, while the top eight markets, above $250 billion, are likely Last Touch targets.
- • Building features reflect the location-functionality tradeoff: Last Touch assets are typically older and smaller, while Multi-Market assets skew newer and larger with higher clear heights and more dock doors.
Summary
Prologis Research has published a framework intended to give the logistics real estate industry a common vocabulary for property types, arguing that current definitions rarely extend beyond "warehouse/distribution" and "flex." The paper focuses on the consumption end of the supply chain, where e-commerce and rising service-level expectations are generating new requirements. The framework is built on three questions: the differentiating factor across segments is urgency, the underlying demand driver is consumption of goods, and the end goal of site selection is operational efficiency through aggregation potential or high throughput.
The four categories are differentiated by how long goods spend in transit to their final destination. Last Touch facilities can reach large, dense, affluent populations within hours and are typically the oldest and smallest buildings, located in very infill areas. City Distribution facilities support one- to two-day shipping across an entire large market and tend to be small to mid-sized urban assets. Multi-Market facilities, usually newer and larger and situated at transportation hubs on the periphery of major cities, can reach multiple markets within one day's truck drive. Gateway facilities are multi-market buildings with access to major seaports and intermodal ports, concentrated within two hours of ports such as Los Angeles/Long Beach, Hamburg, Shanghai, Chicago and Paris.
Site selection relies on income data as a proxy for consumption, which Prologis describes as reliable and highly correlated with spending. Drivetimes rather than distances are used to account for geography, infrastructure and congestion. The top 25 U.S. markets qualify for at least a City presence, and the top eight are likely Last Touch targets. Prologis also cites Tokyo, London, Shanghai, Paris and Mexico City as major 24-hour cities that generate Last Touch demand.
The paper illustrates how market size affects reach. According to the analysis, roughly $600 billion of income can be reached within one hour of central Manhattan, representing about 56% of total market income, while Atlanta's city center reaches about $180 billion, or 94% of its market. Income Reach, the ratio of income within a one-hour peak-traffic radius of a property to income within the same radius of city center, is used to rank locations within markets, with Last Touch requiring 95% or higher and City sites 85% or higher.
For Gateway and Multi-Market facilities, Prologis concludes that a single ranking by income reach is not a useful qualifier for national coverage, since full continental coverage typically requires multiple locations with varying access. Functionality matters more, including clear height, layout, parking and dock doors. Congestion risk is highest for Gateway and Multi-Market facilities. Prologis estimates the U.S. split at roughly 45% Multi-Market, 20% Gateway, 25% City and 10% Last Touch, and provides a European estimate of 50% Multi-Market, 10% Gateway, 30% City and 10% Last Touch. The model is designed to be adapted to specific users, such as luxury retailers focused on high-income households, and to evolve with supply chain practices.
The four categories are differentiated by how long goods spend in transit to their final destination. Last Touch facilities can reach large, dense, affluent populations within hours and are typically the oldest and smallest buildings, located in very infill areas. City Distribution facilities support one- to two-day shipping across an entire large market and tend to be small to mid-sized urban assets. Multi-Market facilities, usually newer and larger and situated at transportation hubs on the periphery of major cities, can reach multiple markets within one day's truck drive. Gateway facilities are multi-market buildings with access to major seaports and intermodal ports, concentrated within two hours of ports such as Los Angeles/Long Beach, Hamburg, Shanghai, Chicago and Paris.
Site selection relies on income data as a proxy for consumption, which Prologis describes as reliable and highly correlated with spending. Drivetimes rather than distances are used to account for geography, infrastructure and congestion. The top 25 U.S. markets qualify for at least a City presence, and the top eight are likely Last Touch targets. Prologis also cites Tokyo, London, Shanghai, Paris and Mexico City as major 24-hour cities that generate Last Touch demand.
The paper illustrates how market size affects reach. According to the analysis, roughly $600 billion of income can be reached within one hour of central Manhattan, representing about 56% of total market income, while Atlanta's city center reaches about $180 billion, or 94% of its market. Income Reach, the ratio of income within a one-hour peak-traffic radius of a property to income within the same radius of city center, is used to rank locations within markets, with Last Touch requiring 95% or higher and City sites 85% or higher.
For Gateway and Multi-Market facilities, Prologis concludes that a single ranking by income reach is not a useful qualifier for national coverage, since full continental coverage typically requires multiple locations with varying access. Functionality matters more, including clear height, layout, parking and dock doors. Congestion risk is highest for Gateway and Multi-Market facilities. Prologis estimates the U.S. split at roughly 45% Multi-Market, 20% Gateway, 25% City and 10% Last Touch, and provides a European estimate of 50% Multi-Market, 10% Gateway, 30% City and 10% Last Touch. The model is designed to be adapted to specific users, such as luxury retailers focused on high-income households, and to evolve with supply chain practices.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.