The headwinds dealing with industrial port markets within the first half of 2022 — together with elevated dwell occasions for cargo ships, landside bottlenecks, and chassis shortages — seem like easing, however progress expectations for 2023 could also be tempered by inflation, ongoing provide chain points, and ensuing disruptions.
A brand new report from Cushman & Wakefield notes that the Nationwide Retail Federation is projecting decrease port volumes within the second half of 2022 as many retailers stocked inventories early in preparation for the vacation procuring season. Shipments are additionally anticipated to gradual as the general financial system slumps. Cargo ships are additionally more likely to be congested for the close to future because of a surge in empty containers in outbound visitors.
Cushman consultants are additionally conserving an in depth eye on the continuing West Coast port negotiations. Whereas talks “haven’t but had a considerable hostile impact on cargo shipments as a complete,” ought to they “hit a stalemate and a slowdown or shutdown happen, the impacts might be felt by port operators and customers throughout the nation,” the report predicts. And though the White Home not too long ago stepped in to avert a possible strike by the nation’s two largest rail unions, the deal is just not a certain factor. Cushman analysts say the strike might cease intermodal service from some main ports to many key markets throughout the nation and will value the U.S. financial system roughly $2 billion per day.
The rest of 2022 is predicted to complete sturdy, as industrial rents stay at file highs amid traditionally low emptiness charges. The typical rents for port markets completed the second quarter at $12,209 pf, almost 45% greater than the US common of $8.36 psf. Seven industrial markets near main ports posted double-digit rents, and markets across the main cargo ports recorded six of the highest 10 common asking rents within the US for warehouse area. And “taking rents for Class A logistics area in lots of instances had been a lot greater, significantly inside new building tasks in and across the ports,” the report notes. To wit: in New Jersey, taking rents exceeded $20 psf in some instances and a few even reached $30 psf, whereas new developments in Los Angeles and Los Angeles have garnered rents within the $20 to $30 psi vary.
As of the center of the yr, seven industrial markets had emptiness charges of two% or decrease, together with the Inland Empire (0.6%), Savannah (0.6%), Los Angeles (1%) and New Jersey (2%).
