International trade and movement of goods have become the primary drivers of demand for logistics real estate over the past 10 years. Large warehouse and distribution buildings have been constructed along the coasts in close proximity to sea ports handling inbound containerized cargo flows as well as inland near intermodal rail yards that facilitate the movement of goods to end consumers. Although the sector was not immune to the recession, its impact was muted by corporate cost reductions that resulted in supply chain reconfigurations and further outsourcing, generating demand for logistics real estate. At mid-year 2011, logistics real estate stood above its pre-recession peak, a result not seen in the overall industrial sector.
The future looks equally bright. Containerized cargo is expected to grow at a multiple of the overall economy and sea ports and rail companies are making considerable infrastructure investments to keep up. Although investment into the real estate logistics sector slowed to historic lows during the past two years, positive demand has driven vacancies down and new speculative construction is on the horizon.
The First Half 2011 Grubb & Ellis Logistics Market Trends report provides an overview of the U.S. logistics sector as well as an in-depth look at local drivers and performance across 12 sea port and eight intermodal logistics markets.