An algorithm named Lanet whereby the overlay network construction is based on the location information of underlying physical topology is presented. Each peer is connected to a small subset of the other peers which are close in the physical network. The peers that are close in the logical network are also close in the physical network. As a result, the expected delay of each hop in the routing path is very low. This leads to low latency stretch of the overlay network. This algorithm is scalable and distributing for a fixed subset of nodes act as landmarks is not required. Simulation results indicate that the latency of data location in these location-aware systems that are constructed with Lanet can be significantly decreased.