Imports, E-Commerce Drive Industrial Real Estate Demand
Seaports are a vital economic engine for the United States and a huge driver of demand for industrial real estate. Imports represented 63 percent of the total loaded cargo volume in 2017 for the top 13 ports in the United States. As imports continue to rise steadily in many ports across the country, and e-commerce experiences explosive growth, the appetite for nearby industrial space—warehouses, distribution centers, and fulfillment centers—has been hearty. According to Cushman & Wakefield's U.S. Ports Update YE2017:
- The U.S. industrial market has now recorded more than 240 million square feet of absorption for four consecutive years—the strongest run on record.
- The warehouse market remains tight with vacancy tracking at 5.2 percent in Q4 2017. Over the past year, logistics-related vacancy has declined 50 basis points (from 5.7 percent to 5.2 percent) despite the delivery of 168.6 million square feet of new speculative warehouse product.
- These banner numbers do not occur without healthy port markets, which accounted for
28 percent of the net absorption registered in 2017 and vacancy rate of just 3.5 percent.