Seeing Past the Pandemic: Industrial Demand and U.S. Seaports
March 25, 2022
In light of recent port congestion and supply chain issues, the NAIOP Research Foundation commissioned "Seeing Past the Pandemic: Industrial Demand and U.S. Seaports." This research brief, authored by Avison Young data experts, explores how closely industrial demand is tied to trends in port activity.
Specifically, it examines major U.S. port activity, truck traffic, and industrial space absorption, finding that changes in import volume substantially affect occupancy in port markets. Although the current port congestion may not last, industrial landlords can have confidence that port-accessible space will remain in high demand, even in the face of new construction.
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- Despite a brief disruption in trade in the early months of the COVID-19 pandemic, increasing trade volumes have supported long-term growth in industrial space absorption at port markets.
- Smaller markets adjacent to recently expanded ports have experienced the strongest relative growth in demand for industrial space, but the Los Angeles-Long Beach port complex has experienced the largest increase in total trade volume, supporting strong demand for local industrial real estate.
- The impact of port activity on real estate depends on the proportion of total industrial activity linked to the port. This effect is apparent in both larger and smaller markets.