View the full report here.

Shifts in the global trade landscape are largely poised to benefit commercial real estate in the Southeast U.S., home to growing ports well positioned to take advantage of the directions the trade winds are blowing.  

That’s according to corporate real estate giant CBRE, which issued a detailed July report on global trade flows that paints a positive picture for industrial markets in the region as well as the Gulf Coast 

COVID-19 has revealed the vulnerability of just-in-time supply chains, as well as over-reliance on major logistics mega-regions: the West Coast of the U.S., northern Europe and Asia, the report said.  

Due to cost pressures, global integration will persist even as its makeup changes. Much has been made of  potential shifts out of China post-COVID-19, and evidence is emerging in trade figures that it’s real: U.S. trade with Vietnam, Taiwan and even the Netherlands and Belgium grew in 2019 as it fell with China.

While China’s scale means it will remain an irreplaceable manufacturing behemoth, ports like Savannah are in great shape to capitalize on smaller firms’ moves to other parts of Asia and so-called “re-shoring” that could land more capacity back in the U.S., CBRE Chief Economist Richard Barkham wrote in the report. 

“The Southeast region is best positioned for more industrial space demand from import shifts to other parts of Asia, which can reach the East Coast faster through the Suez Canal. This region is also a primary importer of goods from Europe,” the report says.

That’s not to mention that the expansion of the Panama Canal makes it easier for the traditional North Asia-origin shipping routes to reach the East Coast and siphon off more demand from the West Coast strongholds — important given the growing raw demand for imported goods in this region. The Southeast, as classified in the report, is already the most populous U.S. region, with 85 million people and a projected population growth rate of 4.8 percent over five years.  

Savannah, as well as Greenville and Charleston in South Carolina, is already one of the top performing industrial real estate markets in the country, per the report:

“It is particularly impressive that Greenville and Savannah are in the top 10 nationally for overall net absorption because both markets have 200 million square feet or less of total inventory, yet they absorbed more space than much larger markets. This is a direct result of increased demand for products in the Southeast.”  

This focus echoes the rationale cited by proponents of the deepening of the Savannah harbor, who have long said federal funding was warranted because the entire region would benefit. Savannah’s deepening is well under way, and Charleston is now following suit. 

“Charleston, S.C., and Savannah are among the four fastest growing seaports in the country, with twenty- foot equivalent units (TEUs) growing by an average of 6.1 percent in 2019,” the report reads. “While imports are down in 2020 because of COVID-19, these markets are well-positioned for a solid comeback when the economy improves and as companies implement diversification and reshoring strategies.” 

The Georgia Ports Authority last week announced that it had handled a record 37.77 million tons, even as container traffic slipped less than 1 percent to 4.44 million for fiscal year 2020. A news release noted that 5 million square feet of space are under construction to supplement the 74 million already there.

“What sets Savannah apart from the competition is the sheer capacity of the port’s ever-expanding footprint, on and off the terminal,” Will McKnight, GPA’s board chairman, said in the release. “Not only are we focused on the future and providing even greater value to our customers, but we have nearly unlimited potential and capacity to grow our business.”

The CBRE report also indicates that Atlanta and other inland hubs with available land, air access and interstate infrastructure will benefit as demand spills over from coastal markets and e-commerce investments grow.  

View the full report here

As managing editor of Global Atlanta, Trevor has spent 15+ years reporting on Atlanta’s ties with the world. An avid traveler, he has undertaken trips to 30+ countries to uncover stories on the perils...